Markets were mixed on Tuesday.
Early in the day, Asian markets rose, with the Nikkei 225 gaining 1.0 percent.
However, western markets failed to sustain the momentum. The STOXX Europe 600 fell 1.1 percent and the S&P 500 plunged 1.6 percent amid concerns that US-China trade talks set to begin on Thursday will fail.
Some support for markets did come from Federal Reserve Chairman Jerome, who said the central bank believes the current economic expansion can be sustained, and that the Fed intends to expand its balance sheet by purchasing short-term US government debt to support overnight bank-to-bank lending.
However, reports of the US blacklisting Chinese companies and imposition of visa bans on Chinese officials involved in the mass detention of Muslims in the Chinese region of Xinjiang weighed on sentiment.
Mike O’Rourke, chief market strategist at JonesTrading, said that while the Fed's move on buying short-term debt was “very QE-like”, the trade-related reports “took the air out of the Fed rally”.
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