European Uncertainty and Trade Tensions With China Weigh on Markets
*By Alisha Haridasani*
Political uncertainty in Europe and a White House decision to proceed with tariffs against China dragged major U.S. indices down on Tuesday.
“It’s kind of been the one-two punch and the bears are taking advantage,” said Daniel Ives, chief strategy officer and head of technology research at GBH Insights.
The Dow Jones closed down almost 400 points and the S&P 500 slid by more than 1 percent after earlier sell-offs around the world.
European markets faltered as anxiety mounted in Italy, where Reuters reported voters may head back to the polls in [July](https://www.reuters.com/article/us-italy-politics/italy-banker-warns-on-political-crisis-as-investors-fear-for-euro-idUSKCN1IU18I) after parties failed again to form a governing coalition, and President Sergio Mattarella may dissolve parliament and call for a new vote.
Italy, the bloc’s fourth largest economy and a founding member of the eurozone, hasn’t had a government since national elections in March.
A handful of populist, anti-EU parties won at the polls, but none of them garnered enough seats for an outright majority. The leading Five Star Movement has been unable to cobble together a government with anti-immigrant nationalists.
Investors worried the rising eurosceptic sentiment and political turmoil in Italy could spill over to other European Union countries and further erode the institution that has united most of the continent for more than 60 years.
“There’s hypersensitivity here to what’s happening in Europe,” Ives said.
As Europe fretted over Italy's political future, the Trump administration [announced](https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-confronting-chinas-unfair-trade-policies/) Tuesday it will move forward with 25 percent tariffs on $50 billion worth of Chinese imports, a move that rattled the markets and surprised China. The White House said the tariffs would apply to goods "containing industrially significant technology,” and a list of specific imports will be released next month.
The administration’s decision to spurn Chinese imports comes more than a week after Treasury Secretary Steve Mnuchin said a trade war between the world’s largest economies was “on hold” while negotiations continued.
“We feel surprised by the tactical statement issued by the White House, and yet it was also unsurprising,” a Chinese official [reportedly](https://www.nytimes.com/2018/05/29/business/white-house-moves-ahead-with-tough-trade-measures-on-china.html) said Tuesday in a statement carried by the official Xinhua news agency.
For the full interview, [click here](https://cheddar.com/videos/political-uncertainty-spurs-market-sell-off).
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
