Dow drops nearly 800 points as trade jitters rattle investors

Asia shares sink after Wall Street sell-off

Asia shares sink after Wall Street sell-off

The S&P 500 opened lower by 7.94 points, or 0.28 per cent, at 2,782.43.

Similarly, the S&P 500 dropped by 2.5pc with financials dropping by 4.0pc and industrials dropping by 3.5pc. Benchmark U.S. crude rose 0.6 percent to $53.27 per barrel in NY.

Stocks took a nosedive on Wall Street as investors anxious that a U.S.

US President Donald Trump appeared to be back in fighting mode after the weekend show of comity, saying he would "happily" sign a "fair" deal with China but was also ready to take a harder line. The Standard & Poor's 500 slid 3.2 percent to 2,700.06.

The Dow Jones Industrial Average plunged on Tuesday amid fears of an economic downturn, led by disappointing bank earnings and unresolved trade issues between the US and China. Tech companies, banks and exporters including Boeing and Caterpillar all declined.

Over the weekend, Trump had boasted that he had reached a deal with China's President Xi Jinping, although details remained unclear into late Tuesday. Trump himself warned he would revert to tariffs if the two sides could not resolve their differences.

But the market's optimism faded Tuesday amid published reports questioning the scant details out of the Trump-Xi talks and growing skepticism that Beijing will yield to US demands anytime soon.

"Maybe we're not going to get as dovish a Fed as some think", said Joseph LaVorgna, chief economist, Americas at Natixis in NY. During a briefing with reporters, Williams said that, given his outlook for strong economic growth, he continues to "expect that further gradual increases in interest rates will best sponsor a sustained economic expansion". That seemed to counter Fed Chairman Jay Powell's remarks last week.

The jitters helped drive demand for government bonds today, pushing prices higher. The yield on five-year Treasury bonds has fallen below the yield on a three-year bond for two days running, meaning that United States investors are being paid more to hold government debt that matures in three years than in five years. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks.

For Capital Economics, "we doubt that the ceasefire agreed between Presidents Trump and Xi in Buenos Aires will mark a real turning point in the trade war". "Questions on trade, worries about U.S. growth and perceived dovishness on the Fed all play a part in explaining these market moves".

"It's fears about the inverted yield curve and what that means for the economy and is it a precursor to a recession", said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

The Nasdaq fell 283 points, or 3.8 percent, to 7,158. Toll's shares rose 0.4 per cent to $33.67, recovering from a morning sell-off. Brent crude, used to price global oils, dropped $1.48 to $60.08 per barrel. It gained 39 cents the previous session to $62.08.

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