Markets fall as US trade deficit jumps

Markets fell on Wednesday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 fell 1.1 percent and the Nikkei 225 fell 0.5 percent.

Technology stocks bore the brunt of the falls. The Nasdaq Composite tumbled 1.2 percent.

“I don’t see any specific catalyst pushing tech lower, and it’s pretty quiet from the perspective of news about these stocks, which makes me think this is a classic sector rotation,” said Douglas DePietro, managing director for trading at Evercore ISI.

Trade remained a concern as a report on Wednesday showed that the US trade deficit jumped almost 10 percent in July.

David Madden, market analyst at CMC Markets UK, said that “today’s trade figures add creditability to Trump’s protectionist policies”.

Matt Miskin, market strategist at John Hancock Financial Services, still sees “further upside in stocks” but acknowledged risk from emerging market contagion.

Indeed, some analysts see the risk of a 5 percent pullback in stocks.

However, Canaccord Genuity's chief market strategist Tony Dwyer remained optimistic. “Through the year-end, we're going to have somewhere between a 5 and 10 percent gain,” he told CNBC.