Markets fell on Tuesday.
The S&P 500 plunged 3.2 percent, the STOXX Europe 600 fell 0.8 percent and the Nikkei 225 tumbled 2.4 percent.
Analysts are having doubts about whether a permanent trade agreement can be reached between the US and China after noting that the White House, President Donald Trump himself and Chinese officials all described the weekend agreement differently.
“The market is reassessing if anything tangible happened at the Trump-Xi dinner,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company.
Adding to investor concerns is a flattening of the US yield curve. The 10-year Treasury note yield fell 6.9 basis points to 2.921 percent. With the 2-year yield falling 2.2 basis points to 2.811 percent, the spread between the 2-year yield and the 10-year rate was about 11 basis points, the narrowest in 11 years.
“Recessionary fear is starting to raise its ugly head,” wrote Stephen Innes at broker Oanda.
Indeed, Mike Wilson, chief US equity strategist at Morgan Stanley, sees an “earnings recession” at some point in 2019.
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