In this framework, the S&P 500 lost 26.78 pointsor a 0.7%a 4,091.85 unitsMeanwhile he Nasdaq fell 19.48 pointsor a 0.2%a 12,349.49. The Industry Average Dow Jones fell 397.29 pointsor a 1.2%a 32,401.11.
“The visit triggered threats from China, enough to send the Shanghai and Hong Kong stocks down more than 2%. The concern would be some confrontation that further complicates the global scenario“, he explained in an eToro report.
The China’s thinly veiled threats to the United States Before Pelosi’s visit and the Chinese military movements in the Taiwan Strait added tension to a hot international scene due to the war in Ukraine and the food crisis it has generated.
“Any kind of geopolitical concern can cause traders who made a lot of money last week to take a little (of the gains) off the table,” market traders say.
On the day, losses in the industrial benchmark caterpillar contributed to the casualties.
The actions of the chip manufacturers with a large exposure to China fell, while Caterpillar fell 5% as slowing construction activity in the world’s second-largest economy and the disruption of operations in Russia added to its supply chain problems.
For his part, heto geopolitical uncertainty The latest comes at a time when financial markets are struggling to deal with the fallout from the war in Ukraine, an energy crisis in Europe, soaring inflation and tightening financial conditions.
The stock market reaction
European stock markets add to the caution maintained by the rest of the markets at the same time as bad news in global factories fuels fears of an economic slowdown.
World markets were nervous, and the index MSCI Asia-Pacific stocks, which do not include Japan, lost 1.4%.
European stocks ended lower in the previous session as energy sector stocks fell on the back of lower oil prices, after weak factory data from the US, Europe and Asia reignited concerns about the demand.
Meanwhile, Asian markets fell on Tuesday on geopolitical fears triggered by the conflict between China and the US. Traders were already nervous at the release of data showing that the region’s economies are beginning to suffer the effects of inflation.
The Hong Kong and Shanghai stock markets lost 2.4% and 2.3%, respectively, while that of Taipei fell 1.6%. Tokyo fell 1.4% while Sydney, Seoul, Singapore, Wellington and Jakarta also recorded declines.
In the foreign exchange market, the Japanese yen, considered a haven investment, rose to its highest level in two months against the US dollar, while the Taiwanese dollar fell 0.7%.
“The risk is increasing,” noted Stephen Innes of SPI Asset Management.
“Pelosi will almost certainly visit Taiwan on Tuesday, so it’s up to China to see if the situation escalates,” Innes added, noting that “it might just be a storm in a teacup, but international investors and Taiwanese are quite worried.
“No one wants a real war, but the risk of mishap or even aggressive escalation of military games is real, and can always lead to tactical error”he warned.
Source: Ambito
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