Markets fell further on Tuesday after bouncing during the day’s trading as the trade war between the US and China intensified.
Additional US tariffs on Chinese goods, as high as 104%, came into effect at midnight.
Despite being up 4% during the day, the S&P 500 closed down 1.57%. The bond market was also hit as 10-year Treasury yields spiked to 4.51%.
See also: Calastone: Investors pull record £3.5bn from UK equities in Q1
‘’The feared escalation of the trade war is playing out and it’s sent another jolt of deep pessimism through markets,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
Streeter said that the tariffs will hurt for both Chinese and US companies and consumers.
“The world’s largest and second largest economies are now locked in a trade war, and neither nation seems willing to back down. Trump appears to have cracked open a door, saying he will negotiate, but China will not want to lose face and compromise.
“There’s also a queue building up for talks with the US as countries bang on the door of the White House, seeking respite from tariffs. This offers glimmers of hope that many compromises will eventually be reached, but unpicking the knot of tariffs will take time.”
S&P 500 futures are down 1.75% so far today (9 April).