US open: Stocks head south as global growth and recession fears reappear
Wall Street trading started off on a sour note at the opening bell on Wednesday, with ongoing trade tensions feeding into concerns around the outlook for global growth, feeding the ongoing inversion in the US Treasury yield curve.
As of 1525 BST, the Dow Jones Industrial Average was down 0.65% at 25,184.05, while the S&P 500 and Nasdaq were both down 0.51% at 2,788.00 and 7,568.39, respectively.
The Dow opened 163 points lower on Wednesday, following on from its 237 point decline during the previous session.
With the world's two largest economies locked in a bitter trade dispute and disappointing economic data from other major economies, investors were in risk aversion mode as fears of another global recession reared their ugly head again.
The US Treasury Department declined to label China as a currency manipulator on Tuesday in their semi-annual foreign-exchange report to Congress.
The report comes despite Donald Trump's repeated complaint that Beijing weakens the renminbi to have the upper hand on the US in trade matters.
Although it did not label China as a manipulator, the report did expand the number of countries under scrutiny for possible FX manipulation from 12 to 21m with Ireland, Italy, Vietnam, Singapore and Malaysia joining China, Japan, South Korea and Germany on the watch list.
Market participants were also focussing on news that German unemployment had unexpectedly risen for the first time in almost two years, with the economic slowdown finally starting to take a toll on the nation's labour market. The number of German's out of work climbed by 60,000 in May.
Italy's dispute with the European Commission over its budget, wins for eurosceptic parties in EU elections and political turmoil in Austria and Greece added further concerns to an already unstable outlook for markets.
Global growth concerns were feeding a rally in global bonds, dragging down yields with the spread between the benchmark 10-year Treasury note and the 3-month Treasury bill moving further into negative territory and at its widest since 2007.
Yield curve inversions of that magnitude are typically viewed as a fairly reliable precursor of an oncoming recession.
Stocks also took a hit in early trading after Robert Mueller III, the special counsel, revealed he would make a "lengthy and substantial" statement related to his Russia investigation at 1600 BST.
On the data front, the Richmond Fed manufacturing survey for May was still to come.
In corporate news, Abercrombie & Fitch shares tumbled more than 24% at the open after its latest set of quarterly figures disappointed in terms of same-store sales, while Michael Kors and Versace parent company Capri Holdings fell 9.93% after revealing that fourth-quarter profits had declined, leading it to issue some downbeat guidance.
Palo Alto Networks will post its most recent figures after the close.