After ending last Friday’s choppy trading session modestly lower, stocks showed a more substantial move to the downside during trading on Tuesday. The major averages all moved sharply lower, adding to the losses posted last week.
The major averages saw further downside late in the session, closing near their worst levels of the day. The Dow slumped 870.74 points or 1.8 percent to 48,488.59, the Nasdaq plunged 561.07 points or 2.4 percent to 22,954.32 and the S&P 500 (SPI:SP500) tumbled 143.15 points or 2.1 percent to 6,796.86.
The sell-off on Wall Street came amid renewed concerns about a trade war between the U.S. and Europe over President Donald Trump’s efforts to take control of Greenland.
Trump has threatened to impose new tariffs on several European nations if they oppose his attempt to purchase the Danish territory, which he claims is imperative for national security.
In a post on Truth Social, Trump announced plans to impose a 10 percent tariff on imports from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland beginning February 1st.
Trump said the tariffs would be increased to 25 percent beginning June 1st and would remain in place until a deal is reached for the U.S. to purchase Greenland.
“Comments from the US president that there is ‘no going back’ on Greenland have sent US indices down sharply today as the world tries to figure out whether this is another example of strategic game-playing masked by bluster, or if he is deadly serious about a land grab from a NATO ally,” said AJ Bell head of financial analysis Danni Hewson.
She added, “There is no certainty that the temperature can be turned down this time, and the continued surge in the price of gold suggests many are hoping for the best but looking to further pad out portfolios with safe haven assets.”
Housing stocks turned in some of the market’s worst performances on the day, dragging the Philadelphia Housing Sector Index down by 2.5 percent.
Significant weakness was also visible among airline stocks, with the NYSE Arca Airline Index tumbling by 2.4 percent.
Networking, brokerage and retail stocks also saw considerable weakness, while gold stocks moved sharply higher along with the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 1.1 percent, while Hong Kong’s Hang Seng Index dipped by 0.3 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index slumped by 1.0 percent, the U.K.’s FTSE 100 Index slid by 0.7 percent and the French CAC 40 Index fell by 0.6 percent.
In the bond market, treasuries extended the steep drop seen during last Friday’s session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 6.4 basis points to a five-month closing high of 4.295 percent.
SOURCE: RTTNEWS