Global markets traded mixed on Tuesday, June 26, as traders monitored U.S. efforts to gain an upper hand in trade with China, particularly in the technology sector.
Germany’s DAX was flat at 12,270 and France’s CAC 40 added 0.3 percent to 5,298. Britain’s FTSE 100 climbed 0.4 percent to 7,539. Wall Street is set for a weak opening after broad losses in the technology sector the day before. Dow futures were down 0.1 percent and S&P 500 futures dipped 0.2 percent.
Eyes will be on U.S. technology stocks, which had tumbled Monday on reports that the Trump administration plans to limit exports of some high-tech products to China, and also limit investment in technology firms by companies with substantial Chinese ownership.
Treasury Secretary Steven Mnuchin’s suggestion that the investment restrictions wouldn’t be limited to China caused stocks to slide further.
The market recovered when Peter Navarro, one of President Donald Trump’s top trade advisers, told CNBC that there was no plan for investment restrictions and that the administration’s probe into alleged technology theft is limited to China.
Tech stocks have been the pillar of Wall Street’s long-running bull market. All but one of the 72 technology companies listed on the S&P 500 index closed lower Monday.
U.S. efforts to secure a pole position in trade are seeing some hit back. Iconic American motorcycle maker Harley-Davidson said it would move some production overseas to avoid tariffs the European Union is placing on motorcycles made in the U.S. Those tariffs were a response to taxes the U.S. placed on steel and aluminum from Europe.
Harley-Davidson shares plunged 6.0 percent to $41.57 on Monday. In less than two weeks, fresh tariffs imposed by the U.S. and China on each other will also kick in. A 25 percent tariff will be imposed by the U.S. on billions of dollars of Chinese products.
In response, China will raise import duties on $34 billion worth of American goods. China and the European Union agreed on Monday to launch a group that will, among other things, try to preserve support for international trade amid U.S. threats of import controls.
