US markets swung wildly on Tuesday as trade tensions between Washington and Beijing escalated again. Stocks opened sharply lower after China tightened restrictions on global shipping, imposing sanctions on five US subsidiaries of South Korea’s Hanwha Ocean. The Chinese government described the move as a step to strengthen its security.
The volatility only grew later in the day after President Donald Trump accused China of refusing to buy American soybeans, calling it an “economically hostile act” and hinting at retaliation, including a potential cooking oil embargo. The remarks dragged the S&P 500 from solid gains into negative territory by the close.
The S&P 500 fell 0.2% to 6,644.31, having swung between losses of 1.5% and gains of 0.4% during the session. The Nasdaq Composite dropped 0.8% to 22,521.70, while the Dow Jones Industrial Average managed a 0.4% rise, or 202 points, closing at 46,270.46. Caterpillar led the Dow higher after an early 1.3% slide in the index.
The Cboe Volatility Index briefly rose above 22, its highest in four months, before settling at 20.81, underscoring investor anxiety about the lack of a clear resolution to the trade dispute.
Earnings season offers support
Despite the trade headlines, earnings reports offered some comfort. Citigroup and Wells Fargo jumped 3.9% and 7.2% respectively on stronger-than-expected results. JPMorgan and Goldman Sachs also beat forecasts but eased slightly. Analysts say the numbers reinforce that US consumers remain resilient, even as external risks cloud the outlook.
Tech stocks, however, stayed under pressure. Nvidia and other chipmakers continued to slide following last week’s rout.
Local outlook
In Australia, futures suggest the S&P/ASX 200 will open 74 points higher, or 0.8%, despite Wall Street’s late-day reversal. On today’s local agenda, RBA assistant governor Sarah Hunter addresses the Citi Australia & New Zealand Investment Conference in Sydney, while key September inflation data is due from China.
Corporate focus will be on results from Bank of Queensland, 29Metals and Evolution Mining, alongside annual meetings for CBA, Origin Energy and Lottery Corp.
