Major US equity indices witnessed a subdued opening on Tuesday and were being weighed down by concerns surrounding Italy’s budget plans.
Italy’s government proposed a budget deficit target of 2.4% of its GDP, above EU guidelines, which investors now see as putting Italy in conflict with the European Union’s stringent fiscal rules. The worries pushed Italy’s bond yields to multi-year highs, sparking a selloff in Italian banking stocks and denting investors’ appetite for riskier assets.
Meanwhile, the enthusiasm over a US-Canada trade deal turned out to be short-lived and rather seems to have reignited worries over a full-blown trade war between the world’s two largest economies – US & China. The downside, so far, has been limited as investors preferred to rather take cues from incoming positive economic data and corporate earnings.
At the time of writing this report, the Dow Jones Industrial Average added around 13-points to 26,664, while the broader S&P 500 Index and tech-heavy Nasdaq Composite Index treaded water near yesterday’s closing level, around 2,925 and 8,038 respectively.
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