On the macro front, a softer CPI print has ING concerned that U.S. inflation highlights a worrying trend in GDP growth prospects.
Dow Jones Lurches To The Downside On Trump Tariff Report
Among the three major U.S. stock market indices, the Dow Jones Industrial Average was the leader, clinging to gains of 8.72 points or 0.03% to hold at 28,915.77.
The S&P 500 and Nasdaq fell from Monday’s record highs, sliding 0.23% and 0.28%.
The price of gold moved higher in the afternoon session, paring its losses as investors digested the latest trade war developments. Crude oil advanced 0.33%, while bitcoin soared an astonishing 7% to $8,700.
Details about Donald Trump’s phase one deal with China were revealed today, creating choppy conditions in early trade. While much effort has been made to ensure the headline $200 billion figure is as eye-catching as possible, plenty of uncertainty remains.
There are some alarmingly loose provisions. Given China’s history of ignoring concrete international laws, Beijing is unlikely to adhere to optional ones.
This may be what spooked stock market bulls. Combine it with the tariffs that Trump is holding in his pocket, and the risk of China breaking the initial agreement increases substantially.
Soft U.S. CPI Hints At Worrying Trend
On the data front, new CPI data paint a murky outlook for the Dow Jones. Subdued inflation suggests the Federal Reserve will maintain loose monetary policy, but it also hints at inherent weakness in the labor market, which powers U.S. consumer spending habits.