Major US equity indices opened firmly lower on Wednesday and snapped five consecutive days of winning streak amid escalating US-China trade war fears.
The Trump administrations, late-Tuesday, said that it would assess 10% tariffs on a further $200 billion worth of Chinese imports and revived fears of a full-blown trade war between the world's two largest economies, resulting into a global risk-aversion trade.
However, expectations of strong profit growth from the upcoming second-quarter earnings reports, signalling a strong economy, might provide a floor for equity prices, at least for the time being.
On the economic data front, the June producer price index rose 0.3% m/m, with the yearly rate jumping a whopping 3.4% to mark its highest rise since Nov. 2011. The hotter than expected PPI print, along with the trade issue should continue to cap any up-move ahead of Thursday’s consumer inflation figures.
During the opening hour of trade, the Dow Jones Industrial Average was down over 140-points to 24,778 and the broader S&P 500 Index slipped around 14-points to 2,779. Meanwhile, tech-heavy Nasdaq Composite Index retreated nearly 45-points and is now fast approaching the 7,700 round figure mark.
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