United States markets extended losses for the second session on Tuesday (Wednesday AEST) as ambiguity over international trade negotiations weighed on sentiment.
The Dow Jones Industrial Average dropped 389.8 points, or 1%, ending the session at 40,829.0. The S&P 500 fell 43.5 points or 0.8% to close at 5,606.9, while the Nasdaq Composite declined 154.6 points or 0.9% to 17,689.7.
Tesla shares fell 1.8% following national data that showed a significant drop in new car sales in the UK and Germany - reaching their lowest level in over two years - even as the broader demand for electric vehicles increased.
Registrations fell nearly 46% year-on-year to just 885 vehicles, according to the Kraftfahrt-Bundesamt (KBA), despite overall growth in electric vehicle sales. Year-to-date deliveries also fell sharply, down over 60% to 5,820 units.
Major technology stocks also struggled, with Meta Platforms down 2%, NVIDIA easing 0.3%, and Microsoft down 0.7%.
Market unease grew after U.S. President Donald Trump met Canadian Prime Minister Mark Carney, their first formal meeting since Carney took office earlier this year.
Despite this, U.S. Treasury Secretary Scott Bessent offered a more optimistic outlook, stating the administration might unveil trade agreements with key partners “as early as this week”, though he provided no specifics.
"I expect that we can see a substantial reduction in the tariffs we are being charged, as well as non-tariff barriers, currency manipulation and subsidies, both in labour and capital investment," Bessent told the House Appropriations Committee.
Meanwhile, the U.S. Federal Reserve commenced its two-day policy meeting on Tuesday, with a decision expected on Wednesday (Thursday AEST).
Market consensus suggests the central bank will hold interest rates steady. The CME FedWatch Tool currently indicates only a 3.1% probability of a 25-basis point rate cut.
Investors will closely watch Fed Chair Jerome Powell’s comments for insight into the central bank’s economic outlook.
Bond markets saw lower yields. The 10-year Treasury yield fell 1.2% to 4.298%, while the 2-year yield slipped 1.5% to 3.785%.
