US Stocks Decline Alongside Dollar Amid Renewed US-China Trade Tensions

Just like the US dollar, Wall Street stocks are retreating due to the resurgence of trade tensions between the United States and China, as reflected in statements made by US Treasury Secretary Scott Bessent last Friday. He highlighted the stalling of negotiations and the need for a strong push to achieve progress.

US stocks are also facing pressure due to rising yields on US Treasury bonds, which continue to climb amid heavy selling of government securities. This selling is driven by an inverse relationship between bond prices and their yields, exacerbating market dynamics.

The Dow Jones Industrial Average dropped to 42,132 points, losing approximately 132 points or 0.4%. Similarly, the S&P 500 index fell to 5,913 points, shedding less than 0.1% or about 50 points (correcting the earlier typo). In contrast, the Nasdaq, heavily weighted toward technology stocks, rose by approximately 0.4%.

This inverse relationship has contributed to the sharp sell-off of US Treasury bonds, triggered by declining confidence in American assets following the renewed US-China trade tensions, which has in turn driven up bond yields.

Scott Bessent, the US Treasury Secretary, stated last Friday that trade talks between the United States and China have “stumbled somewhat,” emphasizing the need for a phone call between the US President and his Chinese counterpart to push the negotiations forward once again.