US stock futures and Treasury yields fell on Wednesday after China announced additional tariffs on $50 billion of US goods, a decision that also knocked the Chinese yuan lower.
China will impose additional tariffs of 25 per cent on 106 US goods, including soyabeans, autos, chemicals, some types of aircraft and corn products, among other agricultural goods, the Finance Ministry said on Wednesday.
US stocks futures extended their fall: Nasdaq futures were down 2 per cent, S&P 500 futures fell 1.4 per cent and Dow Jones futures tumbled down 1.7 per cent.
European stocks also extended losses, with the pan-European STOXX 600 index hitting a session low, last down 0.8 per cent. Germany’s exporter-heavy DAX index fell 1.3 per cent.
The Chinese yuan meanwhile suffered its biggest daily fall versus the dollar in two weeks after the measures were announced. It fell 0.4 per cent to 6.3015 per dollar.
But trade war fears boosted demand for top-rated US and European government bonds with the US 10-year Treasury yield last down 2.5 basis points on the day at 2.76 per cent.