IG MARKETS SPONSORED POST
A touch of panic has gripped financial markets. Traders apparently flirted with an optimistic outlook towards the trade-war last week, but judging by price action on the first day of this week, any hope for amiability between the US and China is rapidly diminishing.
As was generally presumed, the Chinese announced that they would be retaliating to the Trump administration’s new round of tariffs on their exports with tariffs of their own. Volatility in the market has subsequently spiked, risk assets or those tied to global growth have tumbled, and safety is being sought, for now, wherever it can be found.
Having already slumped yesterday in response to news that the White House was considering increasing tariffs on all Chinese goods going in the US, China’s announced retaliation overnight gave market participants all the justification they needed to hit-the-sell-button on stocks.
As of the session’s close, the S&P500 has fallen 2.50 per cent, plunging below the support-level around 2855 that had propped-up the market last week. Telling of the markets’ general sentiment, bellwether information-technology stocks led the losses, falling 3.71 percent; and tariff-sensitive consumer discretionary stocks tumbled by 2.95 per cent.