A trader works at his desk during the closing bell on the floor of the New York Stock Exchange (NYSE), on November 20, 2018, in New York City. The Dow sank as much as three percent on Tuesday afternoon, Dec. 4, 2018, as losses on Wall Street accelerated amid worries about the US economic outlook and skepticism over the US-China trade truce. AFP FILE
NEW YORK, United States – The Dow sank as much as three percent Tuesday afternoon as losses on Wall Street accelerated amid worries about the US economic outlook and skepticism over the US-China trade truce.
Near 1900 GMT, the Dow Jones Industrial Average stood at 25,179.89, down about 650 points, or 2.5 percent after earlier slumping as much as 3.1 percent.
The broad-based S&P dropped 2.4 percent to 2,722.31, while the tech-rich Nasdaq Composite Index slumped 2.9 percent to 7,227.48.
The drop came amid a signal from government bond rates seen as an early-warning indicator of a US recession, as well as the confusing status of the touted US-China agreement to halt their trade war.
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The movements in the bond market “clearly show that growth is likely to slow next year and inflation too,” said Karl Haeling of LBBW. “But predicting a recession if the curve inverts is getting ahead of ourselves.”
The difference in yield between the two- and 10-year US Treasury notes has narrowed sharply in recent days, raising concerns about a so-called “inversion” in which interest on short-term bonds overtakes the rate on long-term bonds.
