U.S. stocks drop as US-China tension stirs haven demand
BNN Bloomberg
Stocks and US equity futures slid Tuesday amid escalating US-China tension over Taiwan and deepening worries about a global economic slowdown, driving investors into the safety of government bonds.
The Stoxx Europe 600 fell 0.6 per cent, with energy among the few industries bucking the trend after BP Plc hiked its dividend and accelerated share buybacks to the fastest pace yet after profits surged. An Asian share index slid the most in three weeks, with some of the steepest falls in Hong Kong, China and Taiwan. Contracts on the S&P 500 and Nasdaq 100 slumped as much as 0.8 per cent as July’s equity market rebound stumbled into August.
US Treasury 10-year yields dropped for a fifth day and approached 2.5 per cent, a level last seen in April, while the Japanese currency advanced to the strongest level in two months.
US House Speaker Nancy Pelosi is set to land in Taiwan on Tuesday and would be the highest-ranking American politician to visit in 25 years. China views the island as its territory and has vowed an unspecified military response to any Pelosi visit.
