Trade Tensions and Government Shutdown Rattle Global Markets

Renewed trade tensions between the U.S. and China, coupled with the prolonged U.S. government shutdown, led to a dip in investor risk appetite. The major U.S. stock indexes fell sharply, with European and Asian markets also affected. Oil prices slid, while safe-haven gold prices surged.

Wall Street experienced a sharp downturn on Tuesday as trade tensions between Washington and Beijing, along with the ongoing U.S. government shutdown, intensified investor anxieties. All major U.S. stock indexes plunged, with the Nasdaq bearing the brunt due to slumping megacap stocks. Safe-haven gold prices surged past $4,100 amid the turmoil.

The downtrend was mitigated by an International Monetary Fund report that raised its global growth outlook, crediting milder-than-expected tariff shocks and financial conditions. However, the ongoing trade discord between the U.S. and China casts a shadow over future output, as highlighted by senior vice president at Wealthspire Advisors, Oliver Pursche.

Escalating port fees and the imposition of tighter controls on China's rare earth exports have shaken global markets, with President Trump threatening significant tariff hikes on Chinese imports. Investors remain jittery as limited economic data availability, due to the government shutdown, compounds uncertainty.

(With inputs from agencies.)