Stocks struggled for direction and 10-year Treasury yields slipped to the lowest in more than two months amid concerns that US President Donald Trump’s policies will hurt global economic growth.
Europe’s Stoxx 600 benchmark was little changed. US equity futures pointed to a lower open after a tech-led selloff on Wall Street at the end of trading Monday. Treasuries rallied, with the yield on the 10-year benchmark down six basis points. Asian stocks fell for a second day as Trump spelled out more measures to curb China’s chipmaking industry.
The spread between German 10-year bond yields and similar-maturity interest-rate swaps reached its most negative level on record, reflecting expectations for higher borrowing to fund big outlays on defense spending.
Uncertainty on how the new US administration’s policies will affect global growth and long-established economic and political alliances has prompted investors to pare risk and switch to havens like Treasuries or gold. Bitcoin tumbled below $90,000 to hit the lowest since mid-November as investors stepped back from one of the most popular Trump trades.
“A more accelerated US retreat from global leadership raises risks for multinational corporations and global investors that have long benefited from a stable, rules-based international order,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management.
Trump signaled Monday that tariffs on Mexican and Canadian imports will go ahead, while his administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry.
The Hang Seng Tech Index had slumped as much as 4.4%, pacing losses for Chinese equities in New York. The gauge later erased most of its decline as more than $1 billion worth of money poured into Hong Kong stocks from China.
Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd. and ASML Holding NV engineers from maintaining semiconductor gear in China, according to people familiar with the matter.
This comes after a directive set the stage for a more muscular use of the Committee on Foreign Investment in the United States, or CFIUS, a secretive panel that scrutinizes proposals by foreign entities to buy US companies or property, to thwart Chinese investment.
