US equity close: Bad, but not as bad as it could have been

There was some heavy selling after the open that accelerated until a bottom at 12:30 pm ET. The Nasdaq came perilously close to a 7% decline but there was a bounce there and Trump’s comments that hinted at possibly removing 10% tariffs at least on some countries led to some modest further buying.

Closing changes:

• S&P 500 -3.5%
• Nasdaq Comp -4.3%
• DJIA -2.5%
• Russell 2000 -5.2%
• Toronto TSX Comp -3.4%
• Mexican Bolsa -2.8%

What scares me about the broader price action was that even at the peak of the intraday selling, we had US long-date yields moving higher and the US dollar slumping. I don’t think I’ve ever seen a 6% Nasdaq decline and a 1% rise in the Australian dollar on the same day. That kind of breakdown in correlations in unsettling.

This article was written by Adam Button at www.forexlive.com.