Wall Street wiped out gains for the year Thursday as concerns about a cocktail of factors including trade tensions, Treasury yields, and energy prices weighed on global markets, extending losses following the worst day for US equities in seven weeks.
The Dow Jones Industrial Average shed 2.87%, or about 715 points. The Nasdaq Composite fell 2.15%, and the S&P 500 was down 2.6%.
Selling pressure on futures was so strong in the first six minutes of trading that the CME Group Inc. was forced to intervene with market pauses to prevent severe price movements, according to Bloomberg.
Wall Street had suffered its worst day since October on Tuesday as expectations for a trade deal between Washington and Beijing unwound and after sections of the yield curve inverted. The stock market was closed Wednesday, a national day of mourning for former President George H.W. Bush who died over the weekend.
Canadian authorities said they arrested Meng Wanzhou, the chief financial officer of the Chinese cellular giant Huawei Technologies, on charges related to alleged Iran sanctions violations. The December 1 arrest cast doubt on trade relations between Washington and Beijing, who agreed over the weekend to pause tariff escalations for negotiations.
Optimism around the trade-war ceasefire has since waned after President Donald Trump called himself “a Tariff Man” in a tweet about Beijing, cementing expectations for further trade escalations between the largest economies if a deal isn’t reached within the next three months.
“The market’s in repair mode following one of the worst equity selloffs of the year,” Mark McCormick, a strategist at TD Securities, said in an email.
“There are many moving parts to the puzzle and yet Tariff Man’s tweet looms large. It also wreaks of a classic ‘buy the rumor, sell the fact’ trade