The action of American President Donald Trump has striken both China and the United States. Another round of tariffs on the remaining Chinese imports is likely to lead to damaging consequences for the US economy. The US stock market always instantly reacts to any statements made by Trump, and this time has been no exception. Major stock indices have shown a sharp decline amid growing tensions between the two largest economies in the world. The Dow Jones Industrial Average fell by 2.9% in a day to the level of 25,719.17 points. The S&P 500 lost 3%, closing at 2,844.76 points. The Nasdaq sank by 3.5% to 7,726.04 points. The situation was aggravated by the return move of China. The country had devalued its national currency against the US dollar. In addition, Beijing suspended purchases of American agricultural products. The issue took such a serious turn that Trump was forced to calm down the business community. The president promised a new wonderful deal.

That would be reached Washington increased pressure on China. However, investors remained unconvinced. They believe that the conflict is unlikely to be resolved soon due to the escalation of the trade war and the lack of real agreements. Therefore, market sentiment is highly likely to remain pessimistic.

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