Global Markets Plummet on Lingering Trade Concerns
All three major U.S. stock indexes saw dramatic declines on Monday, leaving them on course for the worst May in 50 years. The S&P 500 is now down 4.6 percent month do date after falling 2.41 percent yesterday. The Dow Jones Industrial Average has shed 4.8 percent this month, and the Nasdaq Composite has plummeted 5.5 percent in May, with a 3.41 percent decline yesterday.
Asian markets were also seeing red on Tuesday. Hong Kong’s Hang Seng Index slumped 1.58 percent as of 12:56 p.m. HK/SIN after declining on Monday as well. China’s benchmark indexes were both lower, with the Shanghai Composite losing 0.36 percent and the Shenzhen Composite down 0.49 percent. Australia’s ASX 200 eased 0.92 percent. As on Monday, only South Korea's Kospi managed to eke out some gains to trade up 0.18 percent.
According to reports published by CNBC, the Office of the U.S. Trade Representative is taking steps that would enable it to place additional tariffs on the remaining $300 billion of Chinese goods that are imported into the U.S. President Trump hasn’t officially confirmed whether he will go forward with the tariffs, but the groundwork is being laid in case he decides to proceed. On Monday, President Trump commented that we will see in a few weeks whether or not the trade deal will be successful.
Also on Monday, Chinese officials announced retaliatory tariffs on $60 billion of U.S. goods and expanded duties that may reach 25 percent. Reports of further retaliation indicate that this may not be China’s last stand against Trump’s new tariffs. Both U.S. and Chinese officials have promised to remain strong and have shown no signs of compromise.
The dollar index was unchanged in Asia’s early afternoon. The dollar gained against the Japanese yen after easing on Monday, trading up 0.30 percent to 109.63. The greenback eased against both the British pound and the euro, trading at $1.2959 and $1.1238 respectively.