On Tuesday, all three major US stock indexes experienced a significant drop, marking the worst day for the Dow since early October. This decline comes on the heels of recent record highs reached just last week.
The optimism surrounding a potential US-China trade deal has drastically shifted. Contrary to the previous high spirits in the markets, there is now a prevalent sentiment of doubt about the likelihood of a deal being reached soon. President Donald Trump hinted that the much-anticipated agreement might not materialize until after the 2020 elections. Additionally, the tariffs on Chinese goods scheduled for December 15th are expected to proceed as planned unless substantial progress is made abruptly.
As tensions intensify in the ongoing trade conflict with China, a new trade disagreement has emerged between the US and France. France’s imposition of a “digital tax” targeting large tech companies, perceived as an attempt to restrict American tech giants like Amazon, has triggered retaliatory suggestions from the US for new tariffs on French exports. France, in turn, has threatened further countermeasures.
Of the 11 major sectors outlined in the S&P 500, 9 showed negative performance on Tuesday, with prominent companies such as Apple and Intel experiencing significant declines. The New York Stock Exchange observed a higher number of declining stocks compared to advancing ones, while the total trading volume spiked to 7.41 billion shares on Tuesday, surpassing the 20-day average of 6.83 billion shares traded.
