Sentiment in the tech sector deteriorated after Trump questioned US support for Taiwan, suggesting the island should pay for American protection.
Geopolitical risks weighed heavily on Wall Street Wednesday following comments by US presidential candidate Donald Trumpwho showed an ambivalent stance on defending Taiwan. This led to a fall in the shares of the country’s chipmakers and raised gold prices to historic levels.
S&P 500 futures fell 1% after hitting a record high in the previous session. After a difficult Asian session for Taiwan’s TSMC, which lost 2.4%, in New York and before the market opened, the Taiwanese firm fell almost 6%.
MSCI’s world equity index was unchanged. Sentiment in the tech sector deteriorated after Trump, in an interview with Bloomberg Businessweek, questioned U.S. support for Taiwan.suggesting that the island, claimed by China as its own territory, should pay for American protection.
Other markets
The dollar fell more than 1 percent against the yen as new data from the Bank of Japan showed Tokyo was investing heavily to buy the currency to pull it back from multi-decade lows. The currency pair was trading at 156.4 yen per dollar, having last week crossed the 160 yen mark that investors see as a trigger for intervention by Japanese authorities.
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Sterling hit a record high of $1.3032 after data on Wednesday showed Britain’s annual inflation rate held at 2% in June, beating forecasts for a 1.9% rise, prompting traders to trim bets on a Bank of England rate cut in August. Spot gold rose 0.2% to a record high of $2,473.29 an ounce, boosted by safe-haven buying and rising expectations of U.S. interest rate cuts, adding to pressure on the dollar.
The 10-year Treasury yield was little changed at 4.173%, near a four-month low. The two-year yield was up at 4.461%. Brent crude futures were up 0.2% at $83.94 a barrel and U.S. crude futures were up 0.4% at $81.10.
Source: Ambito
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