Markets fall, increased US tariffs on China could be “final nail in coffin” for bull run

Markets mostly fell on Tuesday.

The S&P 500 plunged 1.7 percent, the STOXX Europe 600 tumbled 1.4 percent and the Nikkei 225 fell 1.5 percent.

The Shanghai Composite rebounded 0.7 percent after having fallen 5.6 percent on Monday.

The trade tension between the US and China remained the main concern after US officials confirmed that tariffs on goods from China could be raised by the end of the week.

“Implementation of the increased tariff levels on Friday could be a final nail in the coffin for these trade talks as well as the equity bull run which we’ve seen since the beginning of the year,” analysts at Rakuten Securities Australia wrote.

Some analysts remain hopeful of a successful outcome to the trade talks.

“I think it’s too early to get so pessimistic, but a lot of investors are,” said Craig Callahan, president of Icon Investments.

“The likelihood the Fed cuts rates if the trade talks collapse is probably the reason the market will hang in better than it should given that the Chinese just upped the ante this morning,” said Ian Winer, advisory board member of Drexel Hamilton.