NEW YORK, New York – U.S. stocks were slaughtered on Tuesday, a day after surging on optimistic prospects of a positive outcome on trade talks between U.S. President Donald Trump and Chinese President Xi Jinping in Buenos Aires.
In China on Tuesday the mood remained optimistic with shares continuing their upward spiral.
However, in the United States questions have begun emerging about the sustainability of the deal, which is subject to a 90 day review if major and broader terms are not agreed. The commencement date of the 90 day window has also created confusion with a White House official saying on one hand it was 1 January 2019, only to have a statement issued saying it was 1 December 2018.
Trump too was back tweeting and throwing doubt on whether a deal would ultimately be agreed, and threatening consequences if they are not.
"President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so," he tweeted on Tuesday.
Investors and traders appear to be gradually losing confidence on a final deal ultimately being struck, driving the Dow Jones and other major indices down.
At the close of trading Tuesday, the Dow Jones industrials were down 799.36 points or 3.10% at 25,027.07.
The Standard and Poor's 500 sank 90.31 points or 3.24% to 2,700.06.
The tech-laden Nasdaq Composite did worst of all, plunging 283.09 points or 3.80% to 7,158.43.
"The market is reassessing if anything tangible happened at the Trump-Xi dinner," Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company, was quoted by MarketWatch as saying.
"The market wants news of concrete steps to lower tariffs, not just pronouncements."
On foreign exchange markets the U.S. dollar and Japanese Yen rose as investors sought safe haven currencies which they do during times of turmoil.
Around the New York close Tuesday, the euro had trimmed to 1.1342. The British pound fell to 1.2720, while the Swiss franc edged down to 0.9972.
The Canadian dollar weakened to 1.3259, while the Australian dollar dropped a third-of-a-cent to 0.7339.
The New Zealand dollar was only fractionally lower at 0.6930.
The Japanese yen meantime firmed about a cent to 112.76.
U.S. markets will be closed Wednesday due to a national day of mourning for former U.S. President George H.W. Bush.
In overseas markets on Tuesday, the FTSE 100 in London fell 39.65 points or 0.56% to 7,022.76.
The German DAX shed 130.14 points or 1.14% to 11,335.32.
The Paris-based CAC 40 lost 41.32 points or 0.82% to 5,012.66.
In Asia, the Nikkei 225 in Tokyo was the biggest loser, dropping 538.71 points or 2.39% to 22,036.05.
The Australian All Ords lost 58.80 points or 1.00% to close Tuesday at 5,797.50.
In China shares rose, the Shanghai Composite adding 11.1597 points or 0.42% to 2,665,95, and in Hong Kong, the Hang Seng gained 78.40 points or 0.29% to 27,260.50.