Dow faces 400-point slide after Huawei executive's arrest renews trade fears

The Dow is on track to slide 400 points at Thursday's open after the arrest of Huawei CFO Meng Wanzhou in Canada renewed doubts about the US-China truce. The S&P 500 is set to decline by 1.7%, while the Nasdaq is bracing for a 2.2% tumble.

The latest sign of tension between Washington and Beijing also sent shudders through global markets. Hong Kong's Hang Seng plunged 2.5% overnight, while European stock markets declined sharply as well.

Meng's arrest serves as a fresh reminder that the United States and China remain in a trade war, despite the ceasefire reached last weekend in Argentina. Tariffs already imposed remain in place and new ones loom if talks fail to reach a breakthrough within 90 days.

"This comes at a truly delicate time," Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote to clients on Thursday. "We think this will force China to take a more aggressive and confrontational approach with the US."

Renewed trade jitters, along with worries about an economic slowdown, sent the Dow plummeting 799 points on Tuesday. US markets were closed on Wednesday in honor of President George H.W. Bush.

Investors are also nervously watching the plunging price of oil. US oil tumbled 2% as OPEC and its allies debate at a major meeting in Vienna whether to enact a supply cut aimed at balancing the market.

Saudi Arabia, the leader of OPEC, hinted that the reduction could be less than what analysts anticipated. Khalid Al Falih, the kingdom's energy minister, told reporters that a cut of 1.3 million barrels per day is "excessive."

Let's block ads! (Why?)