US Treasury benchmark 10-year yields took a dip on Tuesday, falling to their lowest value since July of 2016. The decline comes as all three major US stock indexes fell in a sell-off session of risky holdings, mostly driven by elevated trade concerns coupled with unexpected contraction in US-based factory activity. Specifically, 10-year US Treasury yield is down 2 points, to 1.482 percent; falling to a three-year low of 1.443 percent. That is a drop of more than 50 points in the last month, alone.
Indeed, new tariffs on goods coming into the United States from China finally went into effect over the recent US holiday, Labor Day, weekend. Of course, United States President Donald Trump had hoped the world’s two largest economies would reach some kind of resolution to their continuous trade war, but with no compromise in sight, more aggressive strategies must be under way. And, of course, this has inevitably disrupted the market for several months, straining global economies in the process.
Trump continues to insist that bilateral trade talks with China are commencing favorably, but he also continues to warn that his methods will get “tougher” in the [near] future should negotiations continue through the next presidential election. Obviously he is banking on accomplishing this goal as a cornerstone of his next campaign.
Overall, the market is down coming out of the Labor Day holiday. For example, the Dow Jones Industrial Average fell more than 285 points, about 1.08 percent, to 26,118.02. In addition, the Standard & Poors dropped nearly 20.20 points, or 0.69 percent, to 2,906.27; and the tech-driven Nasdaq Composite plummeted 88.72 points, more than 1.1 percent, to 7,874.16.
On top of all this, falling US stocks has contributed to dips in the European market as well. This has not helped to shore up the losses suffered from concerns over a pending global economic slowdown that have already been hindered by Britain’s frantic departure from the European Union.