Wall Street indexes saw steep declines on Tuesday as traders continued to worry about the potential for the U.S.-Sino trade deal to crumble. The Dow Jones Industrial Average closed down 1.79 percent, its steepest decline since January 3, and the NASDAQ ended the day down 1.96 percent. The S&P 500 saw a 1.65 percent loss, with only 36 stocks in the index posting gains for the day. Tuesday marked the steepest daily loss for the index in nearly four months. All 11 sectors of the S&P 500 ended lower, as did all components of the Dow.
Asian markets took cues from Wall Street and also headed south on Wednesday. The Nikkei 225 was down 1.71 percent as of 12:54 p.m. HK/SIN, its second consecutive day of losses since reopening after a weeklong holiday. Hong Kong’s Hang Seng Index was doed to buck the trend and trade 0.77 percent higher.
Despite what looks like bloodshed in the markets, some analysts are calling on traders to buy the dips and to take advantage of the losses, expecting that there will eventually be a deal between the U.S. and China that will continue to fuel the bull market.
Currency Movements
The U.S. dollar continued its struggle in the early afternoon on Wednesday, with the dollar index trading down 0.18 percent. The dollar continued to ease against its primary trading partners, losing 0.24 percent against the yen to trade at 109.97. The euro gained 0.12 percent against the greenback, trading at $1.12014, while the British pound was mostly flat.
Spot gold hit a one-week high as traders sought the safe-haven asset. It was trading at $1,287.90 at 1 p.m. HK/SIN. “Gold is being supported by risk-aversion buying at the moment. But, there is no change in the underlying momentum in overall sentiment, which seems to be soft,” Jeffrey Halley, an analyst at OANDA, commented.
Trade talks are expected to resume stateside on Thursday.