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Stocks Sink, Havens Gain on Sparring Over Trade: Markets Wrap

U.S. equity futures slumped as the trade-war rhetoric heated up, with Beijing saying it’s ready to restrict the sale of rare-earth minerals to America and President Donald Trump threatening to place escalating tariffs on Mexico. Bund yields sank to a record as investors sought havens.

The new front with Mexico and the threat of retaliation from China sent S&P 500 futures heading for their worst week since the global market rout in December. Contracts on the Dow and Nasdaq also pointed to steep losses, extending declines on reports that China will establish a sweeping blacklist of foreign firms it says damage the interests of domestic companies. The Stoxx Europe 600 Index fell, with all sectors in the red, led by carmakers. Equities dropped in most of Asia, though the magnitude of the declines eased as trading progressed.

The latest move by the self-described Tariff Man would put 5% American duties on all Mexican imports on June 10, rising to 25% in October unless Mexico halts “illegal migrants” heading to the U.S. The Mexican peso tumbled more than 3%, while the dollar jumped along with the yen. Treasury yields slipped to a fresh 20-month trough.

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