U.S. stocks fell sharply again Thursday, following steep drops on Asian and European markets, with investors worried about the fate of trade negotiations between the United States and China, the world’s two biggest economies.
Stock indexes in New York dropped 1.5 percent or more in early trading, following plunging losses on Tuesday. The U.S. markets were closed on Wednesday for the national day of mourning honoring the late President George H.W. Bush.
The U.S. losses followed declining markets in Asia, where the Nikkei closed off nearly two percent, with European indexes dropping nearly three percent in afternoon trading.
The wide rout was partly fueled by the arrest of a key executive of telecom giant Huawei Technologies, whose apprehension in Canada could threaten the recent truce in the trade war between the U.S. and China.
Canadian officials announced Wednesday that Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s founder, was detained in Vancouver last Saturday on suspicion of trying to evade U.S. sanctions on Iran. She now faces a bond hearing Friday, pending possible extradition to the United States to face criminal charges.
Her arrest came on the same day U.S. President Donald Trump and Chinese President Xi Jinping reached an agreement on a 90-day truce on their tit-for-tat tariff hikes in order to forge a new trade pact.
But since then, there have been mixed signals from Trump.
He rattled markets on Tuesday, declaring himself “a Tariff Man,” signaling he would impose more levies on Chinese exports if the two countries did not reach a trade agreement.
Trump said China is planning to resume buying U.S. soybeans and natural gas, which he said confirms his claims China had agreed to start “immediately” buying U.S. products.