Global markets shifted lower Tuesday as investors look for fresh cues on the progress of the U.S.-China trade talks ahead of the weekend’s tariff deadline.
Futures tied to the Dow Jones Industrial Average dropped 0.4%, and the yield on U.S. 10-year Treasurys fell to 1.805%, down from 1.829% Monday. Gold, like government bonds, a traditional haven for investors, rose 0.5%. The pan-continental Stoxx Europe 600 gauge fell 0.9%.
Markets are waiting on a decision from President Trump regarding whether he will delay instituting new tariffs on imports from China by a Dec. 15 deadline, as the levies carry the risk of boosting prices on products for American households and may prompt retaliatory measures.
Meanwhile, U.S. lawmakers are taking aim at China with a new bill that would bar the use of federal funds to buy Chinese buses and railcars, congressional aides familiar with the matter told The Wall Street Journal. That may complicate Mr. Trump’s efforts to reach an initial trade agreement, which would bring to a halt tensions that have made markets jittery for much of the year.
Over in China, the government last year introduced a sweeping policy to curtail its use of foreign technology products by awarding more contracts to domestic suppliers, people familiar with the matter said. The initiative, which hadn’t been made public, may help China double down on its efforts to decouple its technology sector from the U.S.
Markets have been parsing such signals as they try to gauge the potential outcome of the trade negotiations, though some investors say a degree of fatigue has also set in.
“On the one hand, there’s the boy-who-cried wolf aspect, where investors have heard it all before,” said Oliver Jones, market economist at Capital Economics. “On the other hand, the outcome really does impact equity markets one way or another, it impacts the earnings of big tech companies and manufacturers.”
Ahead of the New York opening bell, shares in NortonLifeLock climbed over 4% after The Wall Street Journal reported that the consumer-software company has attracted deal interest from a range of companies including rival McAfee.
AutoZone shares rose almost 6% in premarket trading after the car-parts retailer’s profit beat estimates for the quarter. Regeneron dropped 3.7% after French drugmaker Sanofi said it may sell its stake in the U.S. biotech company.
Within European equities, Sanofi climbed over 4% in Paris after the company said it would stop its research efforts in the challenging field of diabetes, and offered a bullish forecast for its star drug Dupixent.
The U.K.’s FTSE 100 index dropped almost 1%, in line with most other major European markets. Britain is preparing to head to the polls Thursday for a crucial election.
Federal Reserve officials are poised to begin a two-day meeting Tuesday, where they are expected to decide to hold steady on interest rates as Friday’s strong jobs report will likely reassure policy makers about the strength of the economy.
Write to Anna Isaac at anna.isaac@wsj.com
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2019-12-10 13:02:00Z
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