U.S. markets and stock ETFs retreated Friday after President Donald Trump said a meeting with China could be canceled, throwing the markets into another trade-induced tailspin.
“We’re not ready to make a deal, but we’ll see what happens,” Trump told reporters Friday morning. “We will see whether or not China keeps our meeting in September.”
On Friday, the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) fell 0.2% and SPDR S&P 500 ETF (NYSEArca: SPY) was 0.5% lower.
Capping off a volatile week of trade war fears, Trump’s statement is the latest to send markets reeling after global markets oscillated in response to China’s central bank move that escalated the spate between the U.S. with a weakening yuan currency and brought the fight to a new level in the foreign-exchange market.
“There’s a lot more recession talk coming up,” Jack Janasiewicz, a portfolio strategist at Natixis Investment Managers, told the Wall Street Journal. “2008 remains fresh in a lot of investors minds, and people are pretty quick to de-risk.”
Trade War Uncertainty Continues
The lingering uncertainty over the trade war without any clear solution has kept markets on edge.
“Until we get some sort of tangible answers to what the (Trump) administration is going to do with China, this is going to be a overhang on the market, creating plenty of sharp swings,” Andre Bakhos, managing director at New Vines Capital LLC, told Reuters.
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Many investors have shifted away from riskier equities and moved to safe-haven plays, like U.S. government bonds and gold to hedge further market risks. Yields on benchmark 10-year Treasury bonds touched their lowest level in several years while gold prices were on track to hit their highest settle price in over six years.
“The prospect that both governments were going to reach for measures that they hadn’t previously used was very disappointing for markets this week,” sad Paul Christopher, head of global market strategy for Wells Fargo Investment Institute, told the WSJ.
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