- The arrest of Huawei’s CFO causes a diplomatic crisis between China and the U.S.
- European stocks suffer heavy losses.
- All 11 major S&P 500 sectors are in the negative territory.
With the geopolitical tension between the U.S. and China escalating following reports of Canada looking to extradite Chinese tech-giant Huawei’s CFO to the United States to face charges of violating Iran sanctions, investors stay away from risky assets. While major European equity indexes remain on track to finish the day more than 2% lower, Wall Street opened sharply lower to reflect the flight to safety that dominates the markets today. As of writing, the Dow Jones Industrial Average was down 1.7% on the day, the S&P 500 was losing 1.6% and the Nasdaq Composite was falling 2%.
Concerns over the damage this latest development can cause to the trade negotiations between the U.S. and China weighed on the trade-sensitive S&P 500 Industrials and Materials indexes, which were both losing 1.75% in the early trade. On the other hand, the risk-sensitive S&P 500 Technology Index was down 2.5%. Additionally, the uncertainty surrounding OPEC’s supply cuts in 2019 dragged crude oil prices lower today and the S&P 500 Energy Index came under pressure losing nearly 3%.