Asian markets fell in early trading Wednesday after President Donald Trump said a trade deal with China may not come until after the 2020 presidential election.
“In some ways, I think it’s better to wait until after the election if you want to know the truth. But I’m not going to say that, I just think that,” Trump said Tuesday at a news conference in London, where he was attending a NATO summit.
U.S. stocks sank after the remark, though the three major indexes closed above session lows.
Trade tensions could escalate further, after Congress late Tuesday overwhelmingly approved a bill condemning China’s mass detention of ethnic Muslims, and called for sanctions against some officials responsible. China reacted harshly last week to a bill Trump signed last week supporting Hong Kong’s pro-democracy protesters.
fell 1.2%, as the country’s parliament on Wednesday approved a trade deal with the U.S. Hong Kong’s Hang Seng Index
sank 1.1%, while the Shanghai Composite
retreated 0.3%. South Korea’s Kospi
dropped 1%, and benchmark indexes in Taiwan
all fell. Australia’s S&P/ASX 200
declined 1.4% after data showed the economy sputtered in the third quarter despite fiscal stimulus.
Among individual stocks, Fast Retailing
sank in Tokyo trading after the Uniqlo parent said sales fell more than 5% year-over-year in November. Honda
and oil producer Inpex
also fell. In Hong Kong, tech company Sunny Optical
and developers China Overseas Land & Investment
and New World Development
retreated in South Korea, and BHP
and Rio Tinto
tumbled in Australia.
“Until both sides dial down their hawkish rhetoric, markets will continue to pull back earlier optimism,” said DBS Group analysts in a report. “Trade war will be the key driver of sentiment in the immediate few weeks.”
On Wall Street, the benchmark S&P 500 index
fell 0.7% to 3,093.20. The Dow Jones Industrial Average
lost 1% to 27,502.81. The Nasdaq
dropped 0.6% to 8,520.64.
Negotiators have yet to agree on details of an interim deal that Trump has called “Phase 1” deal.
Investors also are also weighing the potential for additional trade disputes.
On Tuesday, Trump proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Alphabet’s
. That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil.
Also Wednesday, Australia disappointed investors by reporting third-quarter economic growth declined to 0.4% over the previous quarter from 0.6% in the three months ending in June. The Australian central bank had described the economy as experiencing a “gentle upturn.”
Benchmark U.S. crude
rose 40 cents to $56.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 14 cents on Tuesday to close at $56.10. Brent crude
, used to price international oils, rose 48 cents to $61.30 per barrel in London. It lost 10 cents the previous session to $60.82.
declined to 108.59 yen from Tuesday’s 108.63 yen.