U.S. stock markets fell again on Thursday, reversing early gains after President Trump tweeted that a 10% tariff would be imposed on $300 billion of Chinese imports, raising concerns about the U.S. -China trade war.
Most of the three major U.S. stock indices rose, expected to record their biggest one-day gain in June, but after Trump's Twitter launch, investors quickly sold off, causing the three major indices to suddenly turn down.
Following Trump's remarks, U.S. Treasury bond prices rose and yields hit their biggest one-day decline in more than a year. The yield on the benchmark 10-year bond fell to its lowest level since November 2016.
The index, the Chicago Options Exchange (CBOE), surged to its highest level since June 4.
"The biggest problem investors have to realize is that this is systemic and will be a continuing problem between China and the United States," said Joseph Quinlan, head of market strategy at Merrill and Bank of America Private Bank's chief investment office.
"Markets don't like uncertainty, which is unexpected news in terms of uncertainty."
The Federal Reserve cut interest rates for the first time in 10 years on Wednesday, and President Powell's speech weakened expectations for further cuts this year. Trump has been supporting interest rate cuts.
"It seems that the president is bullying the chairman of the Federal Reserve in order to launch his trade war," said Michael O'Rourke, chief market strategist at Jonestrading. "The market should not like that."
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