The China Mail - US stocks fall again as global rally fizzles

After trillions of dollars were wiped from the combined value of global equity markets since last week, share prices across the globe clawed back some ground as investors assessed the possibility of Washington tempering some of the levies.

Following winning sessions in Europe and Asia, US indices opened buoyantly as traders embraced talk of White House negotiations with Japan and South Korea in hopes that Trump's trade onslaught might be short-lived.

But investors grew edgy as the day progressed with no concrete progress and the White House confirmed plans for massive tariffs on China to go into effect overnight.

"Obviously investors are clamoring for clarity and there still isn't any," said Jack Ablin of Cresset Capital, who estimated that the market now sees a greater than 50 percent chance of a US recession.

The S&P 500 tumbled into the red in the early afternoon, with losses accelerating in the final 90 minutes of trading. The broad-based index finished down 1.6 percent at 4,982.77, its first close below 5,000 points in nearly a year.

Oil prices also tumbled on the weakening economic outlook. West Texas Intermediate, the US benchmark futures contract, finished under $60 a barrel for the first time since April 2021.

Stocks have been in free fall since Trump's "Liberation Day" event announcing tariffs on major US trading partners last Wednesday.

White House officials have signaled openness to dealmaking while blasting China for enacting sharp retaliatory tariffs in response to the new US levies.

Trump plans to impose another 50 percent duty on Chinese goods at midnight, bringing the additional rate on Chinese products to 104 percent.

European officials, meanwhile, plan tariffs of up to 25 percent on US goods in retaliation for levies on metals, but will spare bourbon to shield European wine and spirits from reprisals, according to a document seen by AFP.

The list proposes levies on goods including soybeans, poultry, rice, sweetcorn, fruit and nuts, wood, motorcycles, plastics, textiles, paintings, electrical equipment, make-up and other beauty products.

An EU spokesman said on Tuesday that the European Commission could present its planned countermeasures to the new levies "as early as next week".

- Rebound in Asia -

Earlier Tokyo's stock market closed up more than six percent -- recovering much of Monday's drop -- after Japanese Prime Minister Shigeru Ishiba held talks with Trump.

Hong Kong's stock market closed up by more than one percent, having plunged more than 13 percent on Monday, its biggest one-day retreat since 1997.

"After multiple punishing sessions, stock markets appear to have started their road to recovery," noted Russ Mould, investment director at the AJ Bell trading group.

He warned, however, that "it's dangerous to think a massive rally will definitely happen, given how Trump is unpredictable".

- Key figures around 2130 GMT -

New York - Dow: DOWN 0.8 percent at 37,645.59 (close)

New York - S&P 500: DOWN 1.6 percent at 4,982.77 (close)

New York - Nasdaq Composite: DOWN 2.2 percent at 15,267.91 (close)

London - FTSE 100: UP 2.7 percent at 7,910.53 (close)

Paris - CAC 40: UP 2.5 percent at 7,100.42 (close)

Frankfurt - DAX: UP 2.5 percent at 20,280.26 (close)

Tokyo - Nikkei 225: UP 6.0 percent at 33,012.58 (close)

Hong Kong - Hang Seng Index: UP 1.5 percent at 20,127.68 (close)

Shanghai - Composite: UP 1.6 percent at 3,145.55 (close)

Euro/dollar: UP at $1.0959 from $1.0912 on Monday

Pound/dollar: DOWN at $1.2766 from $1.2887

Dollar/yen: DOWN at 146.23 yen from 146.84 yen

Euro/pound: UP at 85.78 pence from 85.70 pence

West Texas Intermediate: DOWN 1.9 percent at $59.58 per barrel

Brent North Sea Crude: DOWN 2.2 percent at $62.82 per barrel

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E.Choi--ThChM