Bloomberg news reported on Monday that Washington was preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between Trump and his counterpart Xi Jinping fail to ease the trade war. Trump has also threatened to impose tariffs on the remaining goods imports from China, which past year were worth $505 billion.
The Trump administration has imposed tariffs on $250 billion worth of Chinese imports since July, while Beijing has retaliated with new levies on $110 billion of USA goods. Auto companies rose after Bloomberg News reported that regulators in China intend to propose cutting the tax on imported cars to 5% from 10%. Trading has been especially volatile the last few days. "When it comes to the midterm elections, most people are looking at them optimistically in the sense that usually after midterms the stock market rallies".
The pan-European STOXX 600 index rose 0.01 percent.
The two-year rate rose two basis points to 2.84 percent.
Amazon.com dropped 6.3% to $1,538.88. Its stock traded above $2,000 a share in early September and has fallen 24.5 percent since then. The Nasdaq has plunged 13 percent from its record high reached August 29.
The chill around China and global trade left emerging- market stocks at an 18-month low, with MSCI's index down for a sixth day in a row.
Indeed, mixed messages have become a recurring feature of the administration's approach to China during the trade war, including from the president, who has on a number of occasions made discouraging remarks about the prospect of resolution through dialogue, including talks proposed at the invitation of the US Treasury. "We are seriously concerned about this", Chinese foreign ministry spokesperson Lu Kang said in a statement posted on the ministry's website.
The effects of higher tariffs could be especially severe for tech firms, which make many of their products in China, and for industrial companies, which are already paying higher prices for metals. Figures from the previous year, the most recent data available, showed 44 per cent of Chinese respondents held unfavourable views of the US.
Broad gains in the US equity market turned global stocks higher on Tuesday after President Donald Trump said a "great deal" could be struck with China that would relieve fears of a growing trade war between the world's two largest economies.