Global Stock Markets Retreat Amid Trade War Escalation

By Dow Jones Newswires StaffEuropean stocks reversed early gains and U.S. futures retreated into negative territory after China's latest salvo on tariffs.In an escalation of the trade conflict between the two countries, China said it would increase tariffs on U.S. imports to 125%, but signaled it wouldn't match any further increases by Washington.In Europe, major indexes reversed early gains after the China news. The Stoxx Europe 600 fell 0.2%, the U.K. blue-chip FTSE 100 lost 0.3%, while France's CAC 40 fell 0.9% and Germany's DAX fell 0.8%.The dollar was down. The DXY dollar Index fell to three-year low of 99.412, and the dollar fell to a 10-year low versus the Swiss franc at 0.8113. The euro rose to a three-year high of 1.1420, according to FactSet.U.S. stock futures fell into negative territory after the China news and a big tumble on Wall Street Thursday, and ahead of major bank earnings later Friday.Most Asian equity markets ended lower Friday, China aside, after a choppy session. Japan's Nikkei Stock Average fell 3.0% led by falls in electronics, pharmaceutical and auto shares. South Korea's benchmark Kospi fell 0.5% and Australia's S&P/ASX 200 closed down 0.8%, paring early losses. China's benchmark Shanghai Composite Index gained 0.45%.The 10-year Bund yield last traded 0.4 basis point lower at 2.587%, while the 10-year Treasury yield was up 3.5 basis points at 4.429%, according to Tradeweb.Gold traded up 2% at 3,241.20 an ounce amid continuing safe-haven demand.Write to Barcelona Editors at [email protected]