China trade war escalates

A trader works on the floor of the New York Stock Exchange in New York U.S. on Monday Oct. 29

Broad gains in the USA equity market boosted a measure of global stock markets on Tuesday after President Donald Trump said a "great deal" could be struck with China that would relieve fears of a growing trade war between the world's two largest economies. The report cited unnamed sources who said the tariffs could cover imports from China that have not already been hit by tariffs, amounting to up to $257 billion worth of imports.

US-China Business Council senior vice president Erin Ennis said that it would not be a surprise to see Trump move towards announcing more tariffs, given his repeated threats to do so.

The effects of higher tariffs could be especially severe for tech firms, which make many of their products in China, and for industrial companies, which are already paying higher prices for metals. During a daily briefing, Lu Kang, a spokesman for China's Ministry of Foreign Affairs, told reporters the US should adopt a serious attitude and hold talks with China on the basis of equality and good faith instead of making other kinds of noises if it's honest about resolving trade frictions.

The chill around China and global trade left emerging- market stocks at an 18-month low, with MSCI's index down for a sixth day in a row.

The Nasdaq composite, which is heavily weighted with technology stocks, lost 116.92 points, or 1.6 percent, to 7,050.29. The rally helped turn both the S&P 500 and the Dow Jones Industrial Average once again positive for the year, though each is up less than 1 percent since the beginning of January. The reason the yuan is being dumped now is that investors are concerned about a trade war between America and China. IBM Chairman and CEO Ginni Rometty said the deal will make IBM the world's biggest hybrid cloud provider, meaning it will offer companies a mix of on-site, private and third-party public cloud services.

If the new duties are imposed, all imports from China would be subject to U.S. tariffs. Futures for the Dow were up 0.4 percent and the broader S&P 500 futures added 0.5 percent.

Germany's DAX rose 1.2% as Volkswagen, Daimler and BMW made big gains.

The S&P 500 fell as much as 11 percent from its all-time high before paring the drop in the final 15 minutes of trading. Brent crude, used to price worldwide oils, lost 19 cents to $77.18 per barrel. The MSCI All-Country World Index has dropped more than 8 percent in October, poised to post the worst monthly performance since May 2012.

CURRENCIES: The dollar strengthened to 112.95 yen from 112.37 yen late Monday.

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