Fears of new trade tensions with China have driven main indexes lower on Wall Street, with a rebound in tech shares tumbling and adding to losses triggered by these concerns. The Dow led major indices lower with a 1.3 percent drop, following a mixed day on European equity markets. Market watchers have been focusing on the overbought state of tech shares, particularly in artificial intelligence stocks, leading to a rise in the VIX volatility index. Speculation about US President Joe Biden potentially exiting the 2024 campaign has also caused some short-term election anxiety among investors.
In Europe, major stock markets ended the day mixed with London getting a boost from the previous day’s oil price surge. Oil prices stabilized after a 2 percent increase on Wednesday, and the dollar firmed following expectations of a US Federal Reserve interest rate cut. The European Central Bank (ECB) kept its key interest rates steady, waiting for stable consumer price rises before considering reducing borrowing costs again.
Tech firms took a hit after reports that Biden could target companies supplying China with semiconductor technology, leading to concerns about potential restrictions on companies like Tokyo Electron and ASML. Trump’s comments about Taiwan paying the US for military defense against China also contributed to the negative sentiment. Overall, the market remains cautious amidst fears of escalating trade tensions and uncertainty surrounding economic policies.
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