NEW YORK (Reuters) - Wall Street took a nosedive on Friday on fears that the world’s two largest economies could resume a trade war, dragging down a global stocks index on a day that many financial markets were closed for a holiday.
The euro rose and the U.S. dollar fell against most of its peers, while the pound succumbed to weak economic data. Crude oil prices traded in and out of negative territory.
A threat by President Donald Trump to impose new tariffs on China in retaliation for its handling of the novel coronavirus outbreak soured investor sentiment.London, Tokyo and New York markets were all open on Friday, although much of Europe and Asia were closed for International Workers’ Day.
Trump offered no evidence after claiming on Thursday he had seen proof that the virus originated in a Chinese laboratory. The pandemic, which has cost more than 60,000 lives in the United States alone, has sparked a steep economic contraction and is threatening Trump’s chances of re-election in November.
“A rise in tension between China and the U.S. certainly could have a negative impact on the U.S. economy and business confidence, which is already hurt from the shutdowns,” said Carin Pai, director of equity management at Fiduciary Trust International in New York.
The Dow Jones Industrial Average fell 622.03 points, or 2.55%, to 23,723.69, the S&P 500 lost 81.72 points, or 2.81%, to 2,830.71, and the Nasdaq Composite dropped 284.60 points, or 3.2%, to 8,604.95.
The benchmark London stocks index lost 2.34% and MSCI’s gauge of stocks across the globe shed 2.17%. The global index rose over 1% this week.
U.S. Treasury
