Shares slide, gold jumps as traders shun threat

By Amanda Cooper

LONDON (Reuters) -International shares tumbled, and protected havens resembling bonds and gold rallied on Tuesday, as traders grew uneasy over tensions between the US and China earlier than talks between the 2 international locations geared toward hanging a sturdy commerce deal.

Markets had earlier joined the rebound from Monday’s money session after U.S. Treasury Secretary Scott Bessent stated President Donald Trump stays on monitor to fulfill Chinese language chief Xi Jinping in South Korea for a two-day summit beginning on October 31. However he added gas to the fireplace in an interview within the Monetary Occasions the place he accused Beijing of making an attempt to wreck the worldwide financial system.

As negotiations between Washington and Beijing intensify, the 2 nations from Tuesday had been charging port charges on ocean transport companies that transfer items starting from toys to crude oil.

‘ESCALATE TO DE-ESCALATE’

“Each Washington and Beijing are posturing earlier than the November summit – escalate to de-escalate,” stated Marc Velan, head of investments at Lucerne Asset Administration in Singapore. “Neither can afford a commerce struggle heading into U.S. midterms.”

Shares in Europe, which have hit report highs this month, had been down 0.7%, echoing weak point in Asian markets, the place know-how shares received hit arduous.

Futures on the S&P 500 and the Nasdaq fell between 0.9% and 1%, suggesting there is probably not a repeat of Monday’s rally, however a full reversal additionally appeared unlikely.

“If one appears on the latest historical past of export controls and expenses for ships docking in ports, then it has been largely interpreted as a path in the direction of negotiation quite than a contemporary outbreak of hostilities on the commerce entrance between the U.S. and China,” Investec chief economist Philip Shaw stated.

“So sure, there may be uncertainty, however you’ve got had an enormous rally, not simply in U.S. shares, however numerous world indices as nicely. And whereas there are nonetheless some query marks over U.S.-China commerce friction, I would interpret the most recent sell-off as a little bit of a correction quite than an enormous stepping-up of investor uncertainty,” he stated.

Wall Road’s principal indexes had ended as a lot as 2.2% greater on Monday, led by chipmakers, after Trump struck a extra conciliatory tone on commerce tensions with China, reversing a few of the panic from Friday when Trump introduced 100% tariffs on China.

MARKET RISK BAROMETERS FLASH RED

Reflecting the elevated investor angst, gold rose 0.5% to $4,130 an oz, simply shy of Tuesday’s new report of $4,179.48. In distinction, bitcoin, which tends to maneuver consistent with different threat belongings, fell 3.6% to $111,793, bringing losses over the past week to almost 12.5%.