Trade Turbulence: Markets React to U.S.-China Tariff Row

Global markets are roiled by ongoing U.S.-China trade tensions, marked by new tariffs and retaliatory measures. As Hong Kong shares dip from highs, the dollar and stock futures fall, raising concerns of a damaging trade conflict. Analysts express uncertainty over future negotiations.

In a fresh flare-up of trade tensions, U.S. stock futures and the dollar tumbled on Tuesday, mirroring the slide in Hong Kong shares from two-month highs. The downfall is attributed to escalating tariffs between the U.S. and China, as both nations are entangled in a tit-for-tat exchange, heightening fears of a wider trade conflict.

"The trade war narrative remains active, with significant developments expected," commented Shane Oliver, chief economist at AMP in Sydney. Stock prices wavered amidst fluctuating news headlines. The S&P 500 futures marked a 0.2% drop after an initial relief rally over U.S.-Mexico-Canada agreements delaying tariffs.

European stock markets saw a minor 0.1% decline in morning trade, while Hong Kong's Hang Seng Index initially climbed on stimulus hopes but later moderated gains. Investors are keenly observing if China can navigate out of impending tariffs through negotiations with U.S. President Donald Trump.

(With inputs from agencies.)