Dollar climbs, emerging markets under pressure

NEW YORK (Reuters) – Stocks fell in major markets around the world on Tuesday, and emerging markets currencies lost ground while the dollar rose as investors braced for an escalation in the U.S.-China trade conflict.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 31, 2018. REUTERS/Brendan McDermid

Emerging markets stocks and currencies were under added pressure on concerns about inflation in Turkey and after data showed South Africa had slumped into recession in the second quarter.

U.S. President Donald Trump could follow through on plans to impose levies on $200 billion more of Chinese imports after a public comment period on his proposed new tariffs on Chinese goods is set to end on Thursday.

Also U.S.-Canada trade talks were expected to resume on Wednesday after the last round ended on Friday with no deal to revamp the North American Free Trade Agreement (NAFTA). Trump has told Congress he would sign a bilateral trade pact with Mexico.

“You have issues concerning NAFTA and China trade issues. You also have a storm in the Gulf of Mexico. What’s really driving the market is a lack of direction one way or the other,” said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.

The Dow Jones Industrial Average fell 12.34 points, or 0.05 percent, to 25,952.48, the S&P 500 lost 4.79 points, or 0.17 percent, to 2,896.73 and the Nasdaq Composite dropped 18.29 points, or 0.23 percent, to 8,091.25.

The pan-European FTSEurofirst 300 index lost 0.74 percent. MSCI’s gauge of stocks across the globe shed 0.48 percent on track for its biggest one-day decline since Aug. 15.

MSCI’s emerging market stocks index was down 0.8 percent on track for its fifth straight day of declines.

The U.S. dollar rose

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