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| Arrest of Top Huawei Executive Sends Stocks Lower | Arrest of Top Huawei Executive Sends Stocks Lower |
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| The arrest of a top Chinese technology executive intensified concerns about an emerging cold war between the world’s two largest economies, sending stock markets around the world lower on Thursday. | The arrest of a top Chinese technology executive intensified concerns about an emerging cold war between the world’s two largest economies, sending stock markets around the world lower on Thursday. |
| The chief financial officer of the Chinese telecom giant Huawei, Meng Wanzhou, was arrested over the weekend, Canadian authorities said on Wednesday night. The arrest, which came the same day President Trump and President Xi Jinping of China agreed to a trade truce, further complicated efforts to resolve to a trade dispute that’s weighed on financial markets. | The chief financial officer of the Chinese telecom giant Huawei, Meng Wanzhou, was arrested over the weekend, Canadian authorities said on Wednesday night. The arrest, which came the same day President Trump and President Xi Jinping of China agreed to a trade truce, further complicated efforts to resolve to a trade dispute that’s weighed on financial markets. |
| Stock markets in Asia and Europe tumbled on Thursday, and an early drop on Wall Street erased gains for the year before stocks in the United States recovered. The S&P 500-stock index ended trading on Thursday down about 0.2 percent, after falling more than 2.5 percent earlier in the day. | Stock markets in Asia and Europe tumbled on Thursday, and an early drop on Wall Street erased gains for the year before stocks in the United States recovered. The S&P 500-stock index ended trading on Thursday down about 0.2 percent, after falling more than 2.5 percent earlier in the day. |
| In recent days, skepticism had already grown about prospects for that 90-day truce, as Trump administration aides downplayed the chances of striking a broad deal and Mr. Trump threatened further tariffs on imports from China, even calling himself a “Tariff Man” in messages on Twitter. | In recent days, skepticism had already grown about prospects for that 90-day truce, as Trump administration aides downplayed the chances of striking a broad deal and Mr. Trump threatened further tariffs on imports from China, even calling himself a “Tariff Man” in messages on Twitter. |
| But the arrest of Ms. Meng, the daughter of Huawei’s founder, threatened to open a riskier new chapter in a fight that investors increasingly see as a threat to performance of financial markets and the economy. | But the arrest of Ms. Meng, the daughter of Huawei’s founder, threatened to open a riskier new chapter in a fight that investors increasingly see as a threat to performance of financial markets and the economy. |
| “This is going to continue to be a headwind at a time when people are worried about global growth,” said Dan Clifton, a head of policy research with analysis firm Strategas. | “This is going to continue to be a headwind at a time when people are worried about global growth,” said Dan Clifton, a head of policy research with analysis firm Strategas. |
| For most of the year, the United States had appeared insulated from such concerns. Less reliant on trade than most wealthy nations, the United States — and American financial markets — had been global standouts for much of 2018, thanks in part to burst of fiscal stimulus from Trump administration tax cuts. | For most of the year, the United States had appeared insulated from such concerns. Less reliant on trade than most wealthy nations, the United States — and American financial markets — had been global standouts for much of 2018, thanks in part to burst of fiscal stimulus from Trump administration tax cuts. |
| But in the rest of the world, the trade war has been causing considerable damage. In China, where the economy is growing at its slowest pace in a decade, stocks have slumped more than 20 percent. Export-based economies that are closely tied to China — like Japan and Germany — have started to struggle too. Emerging markets, which often supply the commodities that have fueled the Chinese boom in recent decades, have been hammered. | |
| Ms. Meng was arrested in Vancouver on Saturday. United States authorities are seeking Ms. Meng’s extradition but have not said what prompted the arrest. | Ms. Meng was arrested in Vancouver on Saturday. United States authorities are seeking Ms. Meng’s extradition but have not said what prompted the arrest. |
| Also weighing on stocks on Thursday was a drop in oil prices, which came even as Saudi Arabia pressed OPEC for production cuts. Exxon Mobil and Chevron both dropped more than 1 amid an ongoing sell-off in crude oil markets. | Also weighing on stocks on Thursday was a drop in oil prices, which came even as Saudi Arabia pressed OPEC for production cuts. Exxon Mobil and Chevron both dropped more than 1 amid an ongoing sell-off in crude oil markets. |
| Persistently weak prices for crude oil have raised questions about the strength of the global economy. In Europe, growth has slowed amid ongoing uncertainty surrounding Britain’s exit from the European Union and the chance that Italy’s populist government is gearing up for a showdown with Brussels over budgetary issues. | Persistently weak prices for crude oil have raised questions about the strength of the global economy. In Europe, growth has slowed amid ongoing uncertainty surrounding Britain’s exit from the European Union and the chance that Italy’s populist government is gearing up for a showdown with Brussels over budgetary issues. |
| Even economic powerhouse Germany, the standout economy on the Continent, contracted during the third quarter, as the uncertainty over global trade crimped its export-focused economy. European stocks tumbled sharply on Thursday, with indexes in Germany, France and Britain all falling more than 3 percent. | Even economic powerhouse Germany, the standout economy on the Continent, contracted during the third quarter, as the uncertainty over global trade crimped its export-focused economy. European stocks tumbled sharply on Thursday, with indexes in Germany, France and Britain all falling more than 3 percent. |
| Many of Germany’s exports go to China, where economic growth has slowed to the most sluggish pace in a decade, amid the ongoing trade tensions with the United States. | Many of Germany’s exports go to China, where economic growth has slowed to the most sluggish pace in a decade, amid the ongoing trade tensions with the United States. |
| In Asia, all major markets ended the trading day down more than 1 percent, and several slid further. The tone for the day was set in Hong Kong, where investors rattled by Ms. Meng’s arrest focused their attention on technology stocks and the overall market dropped 2.5 percent. The shock wave was felt across the border in Shenzhen, where stocks fell 2.2 percent. | In Asia, all major markets ended the trading day down more than 1 percent, and several slid further. The tone for the day was set in Hong Kong, where investors rattled by Ms. Meng’s arrest focused their attention on technology stocks and the overall market dropped 2.5 percent. The shock wave was felt across the border in Shenzhen, where stocks fell 2.2 percent. |
| In Tokyo, the market fell nearly 2 percent after the governor of the Bank of Japan warned that the trade war would hurt the Japanese economy. Traders in Seoul, South Korea, pushed the market down more than 1.5 percent; stocks in Taiwan were down 2.3 percent. | In Tokyo, the market fell nearly 2 percent after the governor of the Bank of Japan warned that the trade war would hurt the Japanese economy. Traders in Seoul, South Korea, pushed the market down more than 1.5 percent; stocks in Taiwan were down 2.3 percent. |
| “The world economy is still expanding at a rapid pace, but cracks are starting to appear in the global growth picture,” Brian Coulton, a chief economist at Fitch Ratings, wrote in a note to clients. Fitch has repeatedly warned of China’s debt binge and the challenges facing the second-largest economy after the United States. | “The world economy is still expanding at a rapid pace, but cracks are starting to appear in the global growth picture,” Brian Coulton, a chief economist at Fitch Ratings, wrote in a note to clients. Fitch has repeatedly warned of China’s debt binge and the challenges facing the second-largest economy after the United States. |
| Those lower yields can crimp the profitability of banks, which charge interest rates that are based on government bond yields. The threat of such pressures has hammered American financial stocks in recent days. | Those lower yields can crimp the profitability of banks, which charge interest rates that are based on government bond yields. The threat of such pressures has hammered American financial stocks in recent days. |
| The sour mood in stocks on Thursday seems a far cry from Monday, when markets were lifted by the announcement that Mr. Trump and Mr. Xi had reached a trade truce on the sidelines of the Group of 20 meeting. Stocks around the globe soared on the news. | The sour mood in stocks on Thursday seems a far cry from Monday, when markets were lifted by the announcement that Mr. Trump and Mr. Xi had reached a trade truce on the sidelines of the Group of 20 meeting. Stocks around the globe soared on the news. |
| But a series of tweets from Mr. Trump, who called himself “a Tariff Man” prompted a new round of selling on Tuesday. Markets in the United States were closed Wednesday to honor the death of former president George H.W. Bush. | But a series of tweets from Mr. Trump, who called himself “a Tariff Man” prompted a new round of selling on Tuesday. Markets in the United States were closed Wednesday to honor the death of former president George H.W. Bush. |
| The only thing that seems certain is more uncertainty, analysts said. | The only thing that seems certain is more uncertainty, analysts said. |
| “While the likelihood of an ongoing dialogue after months of no discussions and the pause on tariffs are still positive developments, it’s clear that negotiations will be challenging and a source of volatility,” Mark Haefele, chief investment officer at UBS wealth management, said in a note to clients. | “While the likelihood of an ongoing dialogue after months of no discussions and the pause on tariffs are still positive developments, it’s clear that negotiations will be challenging and a source of volatility,” Mark Haefele, chief investment officer at UBS wealth management, said in a note to clients. |