Chinese stocks tumbled on Wednesday ahead of the planned imposition of U.S. sanctions.
Stocks in mainland China fell on Wednesday to their lowest levels in over two years, as investors braced for the imposition of U.S. sanctions on up to $50 billion worth of Chinese goods.
Mainland China’s CSI 300 Index plunged 1.3% to 3,363.75, extending its one-month decline to a staggering 12.5%. In Hong Kong, the Hang Seng 100 Index fell 1.1% to 28,241.67. The benchmark gauge is now off nearly 9% compared with last month.
Over in Japan, the Nikkei 225 Index dropped 0.3% to finish at 21,717.04. The declines set the Nikkei back 3.4% for the month.
Later this week, the U.S. government will implement its first round of tariffs on Chinese goods as part of a wider initiative to trim its massive trade deficit with the Asian super-power. President Donald Trump has threatened additional levies on up to $200 billion in Chinese goods should Beijing adopt similar protectionist policies.
The threat of a trade war with China has weighed heavily on Wall Street. Last week, reports that President Trump was looking to bar Chinese nationals from investing in U.S. tech companies sent the S&P 500 Index and Dow Jones Industrial Average plunging.
Wall Street was closed on Wednesday for Independence Day. However, the futures market reported positive results, with the Dow Jones mini futures contract gaining 38 points to close at 24,201. The S&P 500 mini futures contract rose 8.50 points to 2,721.75. The Nasdaq 100 futures price gained 18.75 points to end at 7,042.50.
The Final Word: U.S. stocks are currently mired in their longest corrective phase since 1984. The Dow Jones and S&P 500 have gone more than 100 trading days without setting a new record high.