Uncertainty about what exactly China and the U.S. agreed to in Argentina last week regarding their trade dispute hit equity futures Tuesday.
The Dow Jones Industrial Average futures declined more than 100 points, or 0.46 percent, while the Nasdaq Composite futures fell 0.53 percent and the S&P 500 futures slid 0.36 percent.
The meeting between President Trump and Chinese President Xi Jinping, which took place on the sidelines of the G-20 summit, resulted in the two nations agreeing to a 90-day trade truce that would give time to resolve top trade issues ranging from forced technology transfers, intellectual property protection, non-tariff barriers, cyber theft and agriculture practices.
But uncertainty about when the truce would begin troubled investors. Larry Kudlow, Trump’s top economic adviser, said Monday the truce would begin Jan. 1, 2019, but the White House then said the 90-day period had begun Dec. 1.
U.S. stock futures were also weighed down by the bond market. The spread between the 3-year and 5-year treasury yields inverted on Monday for the first time since 2007, which means the yield on the 5-year fell below the 3-year. Yield curve inversion has typically been considered an indication of recession because it means the interest rate on long-term bonds is lower than the rate on short-term bonds.
Crude oil prices extended gains, rising nearly 2 percent to $53.99 per barrel.
Meanwhile in Asia stocks were mostly lower. Japan’s Nikkei 225 closed down 2.39 percent and South Korea’s Kopsi closed down 0.8 percent. Chinese stocks bucked the trend, with the Shanghai Composite Index gaining 0.4 percent.
European equities fell, with the Britain’s FTSE 100 off 0.64 percent.
On Monday, the first trading day of the month, optimism about the trade deal boosted stocks. The Dow Jones Industrial Average registered a 287.97 point jump or 1 percent. The S&P 500 and the Nasdaq Composite also turned in gains of over 1 percent.
