Dow plunges almost 800 points

Observers calling out Trump over whether trade talks had created any meaningful breakthrough

Traders work on the floor of the New York Stock Exchange. Michael Nagle / Bloomberg

U.S. stocks plunged, with the Dow Jones Industrial Average tumbling almost 800 points, as a litany of concerns wiped out the rally in risk assets.

Trade-sensitive shares sank as angst mounted that the U.S. and China made no meaningful progress on the trade front this weekend. Financial shares got hammered as the yield curve continued to flatten, with the latest nudge from a hawkish comment by a Federal Reserve official.

Losses accelerated and trading volumes in S&P 500 futures spiked after contracts for broke below their 200-day moving average. Adding to the risk aversion was news that U.K. Prime Minister Theresa May’s push to avoid a so-called “hard Brexit” may be at risk.

“Today’s move feels like the market is a scorned lover. It had believed, for whatever reason, that progress was being made at the G-20 and that turns out to be murky — it feels lied to,” said Michael Antonelli, a managing director at Robert W. Baird & Co. “Then a pile of negative Brexit news, Williams starts to ramp up hawkish talk, then we have our yield curve acting like it got run over and boom, we puke.”

President Donald Trump suggested Tuesday that he could extend a 90-day truce in his trade war with China, while his top White House economic adviser backtracked from the president’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars. The developments again called into question the extent of a trade agreement the White House said Trump had struck with Chinese President Xi Jinping over dinner at the Group of 20 summit on Saturday.

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