Asian shares and Wall Street futures dropped Wednesday, as rising worries that U.S.-China trade discussions are stalling and concern about intensifying unrest in Hong Kong hurt demand for risky assets.
MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 1.01% to the lowest in more than a week. Hong Kong shares sank 1.8% to a two-week low, battered by fears that anti-government protests seem like spiraling out of control.
The greenback floated in Asia after U.S. President Donald Trump said a trade agreement was “close”, however, he gave no new details on when or where an agreement would be signed, discouraging investors in what was billed as an important speech on his administration’s economic policies.
Trump further rattled some investors by threatening China with even more tariffs if they don’t sign a contract.
Oil costs tanked as diminishing prospects for an immediate resolution to a 16-month long trade conflict between the world’s two most prominent economies suggested less demand for energy in the future.
Expectations for a “phase one” trade agreement sometime this month have been a vital factor supporting stocks and riskier assets. Nevertheless, the lack of substantial progress on an agreement has only increased doubts about whether a trade agreement will take place at all.
U.S. stock futures plunged 0.27% in Asia after the S&P 500 escaped a 0.16% gain on Tuesday. The S&P 500 and Nasdaq hit all-time peaks during trading on Tuesday, but shares ended off session highs after Trump’s speech.
Xi and Trump have imposed levies on each other’s items in a bitter row over Chinese trade practices that the Trump management says are unfair.