Dow plummets 800 points over economic, trade concerns

Source: The Hill | December 4, 2018 | Niv Elis

Stock markets dropped dramatically Tuesday over concerns of a slowing economy and trade concerns, with the Dow Jones Industrial Average sinking as low as 800 points (3 percent), it’s largest plunge since October.

The S&P 500 was down 63 points, or 2.3 percent.

The drop occurred as the yield curve flattened, and looked at risk of inverting, in what is considered a common early indicator of recessions.

In an inverted yield curve, bond traders expect higher returns in the near term than in the long term, an indication that the market expects the economy to do be worse in the future.

The financial sector led the plunge in the market.

Tuesday’s trading followed a surge on Monday as markets took in the news that President Trump and Chinese President Xi Jinping agreed to freeze an escalating trade war for 90 days.

But the mood on trade soured after President Trump declared himself “a tarrif man” in a threat to Xi if trade talks did not work out.

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