Stocks Fall as China Raises Stakes in Trade Fight: Markets Wrap
(Bloomberg) — Global equities fell after China upped the ante in its trade dispute with the US, stirring fresh concerns over tensions between Beijing and Washington at a time when stocks look stretched after a relentless rally.
S&P 500 contracts retreated 0.7% and Nasdaq 100 futures dropped 0.9% after China placed limits on US entities tied to one of South Korea’s biggest shipbuilders and threatened further retaliation. MSCI’s Asia index declined for a third day — its longest losing streak since August — while European stocks slipped 0.7%.
Tuesday’s moves mark a third day of market swings, with fears of an escalation in US–China tensions returning to the forefront. The S&P 500 has gained more than 30% since its April low, as initial trade concerns gave way to unrelenting optimism over artificial intelligence and the resumption of US interest-rate cuts.
The yen was the top performer among major currencies as Japan’s opposition parties weighed a bid to unseat the long-ruling Liberal Democratic Party. The Nikkei 225 dropped as much as 3.2%, while short-term yields fell on reduced chances of a near-term rate hike. Gold erased earlier gains after briefly nearing $4,180 an ounce, while silver fell after hitting a record high.
Investors’ attention is also turning to the unofficial start of earnings season, with JPMorgan Chase & Co., Goldman Sachs Group Inc., and Citigroup Inc. set to report before the US open. This season, investors will be looking for reassurance on everything from the durability of AI spending to the fallout of elevated tariffs.
“I’d expect increased volatility following the escalation of the trade war with China,” said Susana Cruz, strategist at Panmure Liberum. “As for the earnings season, some sectors appear stretched from a valuation perspective.”
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.7% as of 8:33 a.m. London time S&P 500 futures fell 0.7% Nasdaq 100 futures fell 0.9% Futures on the Dow Jones Industrial Average fell 0.5% The MSCI Asia Pacific Index fell 1.4% The MSCI Emerging Markets Index fell 1.1% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro was little changed at $1.1561 The Japanese yen rose 0.2% to 151.98 per dollar The offshore yuan fell 0.1% to 7.1460 per dollar The British pound fell 0.5% to $1.3262 Cryptocurrencies
Bitcoin fell 3.3% to $111,982.4 Ether fell 6.5% to $4,010.84 Bonds
The yield on 10-year Treasuries declined two basis points to 4.01% Germany’s 10-year yield declined four basis points to 2.59% Britain’s 10-year yield declined six basis points to 4.60% Commodities
Brent crude fell 1.2% to $62.56 a barrel Spot gold rose 0.2% to $4,119.85 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy.
©2025 Bloomberg L.P.
