Rising US-China trade tensions causes decline in S&P 500 sharply

May 8, 2019 | Investopaper

After Donald Trump threatened to increase the tariffs on Chinese goods to 25 percent through a tweet on Sunday, it sparked a doubt on the trade dispute between China and the US to come to an end. The further statement by the US Trade Representative that the US was seeing an erosion in commitments by China led to the decline in S&P this Tuesday.

S&P 500 declined by 1.7 percent in a day which is the worst decline in the last four months. The decline was observed in all 11 sectors with a major decline in tech and industrial stocks which was down by 2.15 percent and 2.02 percent respectively.

Similarly, the Dow Jones Industrial Average index was also down by more than 640 points. All the components of DJIA finished red. Likewise, Asian markets in China, Singapore, Japan, etc.  have also declined due to the fear of reignition of trade tensions between the US and China.

The world economy will be hurt by the tariff dispute between the two leading economies of the world for sure.




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