Assoicated Press/Alex Brandon
- US stocks are set to slip on Tuesday after the Trump administration threatened to slap tariffs on $4 billion worth of EU goods in retaliation for the union’s subsidies to Airbus.
- The news "dented the market sentiment" that had been lifted by the recent truce in the US-China trade war, one analyst said.
- The US Trade Representative’s office has already targeted $21 billion of EU products for potential duties.
- View Markets Insider’s homepage for more stories.
Traders were jittery on Tuesday after the the Trump administration threatened to slap tariffs on $4 billion of meat, cheese, and other EU goods in retaliation for the union’s subsidies to aircraft-manufacturer Airbus. While US futures fell, European stocks were mixed. Airbus fell 0.7%.
Traders’ optimism had been lifted after Donald Trump and Xi Jinping struck a truce in the US-China trade war over the weekend, but the prospect of another trade war between the US and Europe "dented the market sentiment," said Konstantinos Anthis, head of research at ADSS. Trump’s demand that a trade agreement with China would need to be "somewhat tilted" in America’s favor further dampened the mood.
The US Trade Representative’s office added the EU products to its list of $21 billion of eurozone goods that it has targeted for potential tariffs, in response to the harm caused to the US by Airbus subsidies. "The EU has taken advantage of the U.S. on trade for many years," Trump tweeted in April. "It will soon stop!"
Here’s the market roundup as of 9.20 a.m. (4.20 a.m. ET):
- US stocks are set to open lower. Futures underlying the Dow Jones Industrial Average and S&P 500 were down 0.2%, and Nasdaq futures were down 0.3%.
- European equities were also mixed with Germany’s DAX down 0.1%, the Euro Stoxx 50 flat, and Britain’s FTSE 100 up 0.2%.
- Asian indexes were mixed with the Shanghai Composite slightly down, Japan’s Nikkei flat, and Hong Kong’s Hang Seng up 1.2%.
- Crude oil prices dipped with West Texas Intermediate crude down 0.2% at about $59 a barrel, and Brent crude down 0.1% at $65.
- Gold climbed 0.5% to 1.7% t0 $1,396 as investors shifted money to the haven asset.
- Bitcoin was down about 10% at $9,920.
See Also:
- GOLDMAN SACHS: These 14 China-dependent stocks are poised to smash the market if the trade war gets resolved
- The trade war has crippled collaboration across countries — but Morgan Stanley sees the shift opening up several investing opportunities
- A Wall Street quant guru outlines the 11 trades an investor needs to build the perfect portfolio
SEE ALSO: Trump just attacked Mario Draghi — accusing the European Central Bank chief of manipulating the euro
Source: Business Insider – tmohamed@businessinsider.com (Theron Mohamed)