Stocks went into a freefall on Tuesday as worries about slowing economic growth coupled with conflicting statements relating to a trade truce with China triggered a meltdown across Wall Street, erasing gains tied to Fed Chairman Jerome Powell's "just below" comment and Monday's trade rally. Led by losses in the banking and industrial sectors, the blue chip index lost as much as 800 points, sustaining its biggest one-day loss since Oct 10.
The Dow was already down 200 points when President Donald Trump's "I'm a tariff man" tweet reverberated through Wall Street, driving the S&P 500 below its 200-day moving average. The razor-thin spreads between short-term and long-term Treasury securities unleashed recession worries and triggered a market selloff as investors liquidated stocks in nearly every sector of the S&P 500 with the notable exception of utilities.
Geopolitical events were also a drag on Wall Street as the unfolding Brexit crisis in the UK and political instability in Paris weighed on European bourses, driving Germany's DAX lower for the fifth time in six days and the British pound to a 20-month low against the US dollar.
Aversion to risk pushed gold prices to their highest level since July, silver above its 100-day moving average for the first time since June, and the yield spread between the 2-year note and 10-year note to its narrowest level in eleven years.
While today's violent market reaction is likely to reverberate throughout Asia and Europe tonight, US traders will have to wait until Thursday to react as all US financial markets will be closed on Wednesday in remembrance of former President George H.W. Bush.
Dow Jones Industrial Average was down 799.36 points (-3.10%)
S&P 500 was down 90.31 points (-3.24%)
Nasdaq Composite Index was down 283.09 points (-3.80%)
FTSE 100 was down 0.56%
Nikkei 225 was down 2.39%
Hang Seng Index was up 0.29%
Shanghai China Composite Index was up 0.42%
(+) NVLN (+32.65%) Board urged to consider strategic alternatives by large shareholder
(+) RVNC (+19.47%) License deal with China's Fosun Pharma for RT002
(+) RH (+10.90%) Reported better-than-expected Q3 results, raised Q4, FY guidance
(-) BNED (-30.70%) Reported disappointing Q2 results
(-) APHA (-25.45%) Short seller issued damaging report on LatAm operations
(-) CBK (-18.77%) Missed Q3 profit and sales expectations