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US markets end lower as hopes for US-China trade talks fade

09 Oct 2019 Evaluate

The US markets ended deeply in red on Tuesday following reports that the Trump administration imposed visa restrictions on Chinese officials over abuses of Muslim minorities in the Xinjiang region. The new visa restrictions come just two days before the US and China are scheduled to resume high-level trade talks in Washington. Optimism about the trade talks had already waned after a report that China is subtly toning down expectations ahead of this week’s high-level negotiations. Chinese Vice Premier Liu He is leading China’s delegation to Washington but will not carry the title of special envoy for President Xi Jinping, an early indication that Liu has not been given any particular instructions from China’s leader.

On the economic front, producer prices in the US unexpectedly decreased in the month of September, according to a report released by the Labor Department. The Labor Department said its producer price index for final demand fell by 0.3 percent in September after inching up by 0.1 percent in August. The drop surprised participants, who had expected another 0.1 percent uptick. The unexpected decrease in producer prices came amid another steep drop in energy prices, which plunged by 2.5 percent in September, matching the nosedive seen in the previous month. However, excluding the continued plunge in energy prices as well as a modest increase in food prices, core producer prices also slid by 0.3 percent in September after climbing by 0.3 percent in August. Street had expected core prices to rise by 0.2 percent.

Dow Jones Industrial Average dropped 313.98 points or 1.19 percent to 26164.04, Nasdaq declined 132.52 points or 1.67 percent to 7823.78 and S&P 500 was down by 45.73 points or 1.56 percent to 2893.06.

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