The Trump administration blindsided the Dow Jones on Tuesday with the decision to blacklist 28 Chinese companies for their involvement in human rights abuse issues in the Xinjiang region.
China’s retort further hit the stock market as they lowered expectations for trade talks by cutting their planned stay short. However, the Dow recovered from its lows as the sheer scale of the Chinese trade delegation raised hopes for some progress.
The Federal Reserve also pitched in with some dovish commentary.
Dow Jones Falls as Trump Applies Maximum Pressure on China
The Dow Jones Industrial Average was the best performing of the major US indices on Tuesday, as both the Nasdaq and S&P 500 fell more than 0.5%
At last check, the Dow was down 73.26 points or 0.28% at 26,404.76. The DJIA had plunged as low as 26,139.80 earlier in the session.
The Dow blazed back from its lows during the afternoon session. | Source: Yahoo Finance
Commodity markets saw sharp weakness in crude oil on global growth fears and ongoing trade war angst. Gold and silver continue to enjoy market volatility, with XAG/USD – the primary beneficiary – rising over 1.6%.
Further pressure on the stock market came in the form of a surging US dollar. The catalyst for this was a senior aide to UK PM Boris Johnson saying a Brexit deal now looks impossible after a call with German leader Angela Merkel. This sent both the British pound and euro lower and boosted the DXY.
Trump Pressures Stock Market & China with Blacklisting
Donald Trump’s decision to announce the blacklisting of Chinese companies right before critical trade talks can only be described as a tactical decision. This last-minute squeeze, on the face of it, may have hurt negotiations since China reacted negatively, but applying maximum pressure on