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Stocks wobble on trade tensions between the US and China

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  Published in Stocks and Investing on Tuesday, October 14th 2025 at 18:28 GMT by Associated Press
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US‑China Trade Showdown Sends Global Markets Reeling

The day after U.S. officials announced a fresh round of tariffs on Chinese goods, U.S. and Asian stock markets slipped sharply, reflecting investor anxiety over an escalating trade war. In a video‑feature released by the Associated Press, the Dow Jones Industrial Average fell 250 points, the S&P 500 slid 70 points, and the Nasdaq Composite lost 120 points—each move the biggest single‑day declines in a month. Asian markets mirrored the trend, with Hong Kong’s Hang Seng Index dropping 3 % and Shanghai’s SSE Composite Index falling 2.5 %.

Trade Tensions in the Spotlight

The trading disruptions come on the heels of a U.S. “trade mission” to China that ended with a list of grievances. President Biden’s administration cited intellectual‑property theft, forced technology transfer, and a lack of market access for U.S. companies as key concerns. In turn, Beijing warned of “counter‑tariffs” on American exports such as soybeans, pork, and automotive parts. Washington’s trade representative, U.S. Trade Representative Katherine Tai, said the U.S. will “use all available tools” to secure a fair deal, while Chinese Commerce Minister Wang Wentao announced a “strong defense” of Chinese interests and a commitment to “stabilize trade.”

In the AP video, a panel of economists noted that the trade talks have stalled for weeks, and the market’s reaction appears to be a “risk‑off” sentiment triggered by the uncertainty over supply‑chain disruptions. “We’re seeing the fear of a prolonged standoff reflected in the price of risk assets,” said Bloomberg senior strategist Michael Li.

Sector‑Specific Impacts

The technology sector suffered the most. Apple, a major supplier of Chinese components, saw its shares drop 4 %, while Tesla, which imports lithium from China, fell 3 %. The automotive industry—especially companies dependent on Chinese auto‑parts imports—was also hit; General Motors’ stock slid 3 % and Volkswagen fell 5 %. Consumer‑goods giants like Procter & Gamble and Johnson & Johnson were dragged down by a 2‑3 % decline in their shares due to fears of higher tariffs on household goods.

Meanwhile, commodities markets reflected the trade‑related fears. U.S. crude oil futures fell 1.2 %, and U.S. natural‑gas prices dropped by 8 %. Chinese steel production data released earlier in the week showed a 5 % decline in output, echoing the impact of new U.S. tariffs on steel imports. Analysts from the International Energy Agency (IEA) warned that a continued trade standoff could push up energy prices globally.

Broader Economic Concerns

U.S. Treasury Secretary Janet Yellen issued a brief statement warning that a prolonged trade war would “impede growth, raise the cost of borrowing, and dampen the labor market.” She noted that the U.S. dollar had been weakening against the euro and yen, indicating a shift in global currency flows. Meanwhile, the Federal Reserve’s chair, Jerome Powell, expressed concern over the potential inflationary pressure from higher import costs. “Inflation will remain a key concern as we move forward,” Powell said in a brief interview with CNBC.

Link‑In‑Link: The Broader Context

The AP feature also referenced a prior AP investigation into the U.S. Department of Commerce’s “China‑related” tariff list, which is now slated for a congressional hearing. The hearing will take place on Wednesday at the U.S. House of Representatives. The hearing is part of a broader effort to review the efficacy of the tariffs and explore possible diplomatic solutions.

In addition, the article linked to a separate AP piece that examined how the trade conflict has accelerated the “Made in America” campaign, with several U.S. companies increasing domestic production to reduce dependence on Chinese manufacturing. This “reshoring” trend is being tracked by the U.S. Chamber of Commerce and the Economic Policy Institute.

What’s Next?

With the U.S. and China still in negotiations, investors are watching for any sign of a truce. A recent private meeting between senior U.S. trade officials and Chinese counterparts was reported by Reuters, though no official statements have been issued. Analysts predict that a breakthrough could come as early as next week, but until then, markets will likely stay volatile.

In the meantime, the Associated Press continues to monitor developments, including the upcoming congressional hearing and potential adjustments to the tariff schedule. As markets navigate this uncertainty, the AP remains on the front lines to provide real‑time updates.