Markets were mixed on Tuesday.
The S&P 500 fell 0.3 percent and the STOXX Europe 600 plunged 1.5 percent.
However, earlier in Asia, both the Nikkei 225 and the Shanghai Composite rose 0.4 percent.
Investors became concerned after US President Donald Trump warned China that if no trade agreement is reached before the US presidential elections and he is re-elected next year, the terms of an agreement would be much tougher than what is currently being discussed.
Meanwhile, though, Goldman Sachs has raised its year-end target for the S&P 500 to 3,100 from 3,000.
“The dovish Fed pivot has driven the equity market rally in 2019, and we expect low interest rates will continue to support above-average valuations going forward,” wrote David Kostin, the bank’s chief US equity analyst.
Kostin did acknowledge that policy uncertainty, arising, for example, from the US-China trade war, is a risk to stocks.
Indeed, Morgan Stanley chief economist, Chetan Ahya said that “easing won’t suffice to power a strong recovery”. Rather, “the key to reviving corporate confidence and growth lies in addressing the fundamental economic headwind of the day ... trade tensions today”.
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