By 10.05 am the NZX-50 was off by 112 points at 8753, following an 800-point fall on Wall Street's Dow Jones index.
The declines, which put the benchmark S&P 500 on course for its biggest one-day percentage drop in six weeks, more than erased Monday's gains after Beijing and Washington agreed to a 90-day truce to iron out their trade differences. Ten-year yields are below 3 percent. -China trade cease-fire. That revived fears their tariff battle could chill global economic growth.
The New York Stock Exchange and Nasdaq will be closed on Wednesday, for a day of mourning for former President George H.W. Bush, who died on Friday at the age of 94.
Apple shares fell 4.40 per cent in intraday trading after HSBC downgraded the stock, citing too much dependence on a single product and slowing emerging markets economies.
Markets in Europe also fell. The Nasdaq fell 197 points, or 2.7 per cent, to 7,244.
The S&P 500 lost 61 points, or 2.2 per cent, to 2,729.
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The S&P 500 lost 63 points, or 2.3 per cent, to 2,727.
A protracted tit-for-tat over import tariffs has dominated the economic landscape since Trump first imposed them in January, with markets in turn rallying and tanking as investor sentiment veered.
Trump tweeted Tuesday morning about negotiations on a trade deal with China and Chinese President Xi Jinping, reiterating that new tariffs could be implemented in addition to existing tariffs if the talks are unsuccessful. China has said nothing about the commitment to remove vehicle tariffs flagged by the USA, nor did its statement mention the 90-day timeline for talks the Americans have specified.
The Russell 2000 index of smaller-company stocks gave up 68.21 points, or 4.4 percent, to 1,480.75.
Williams' comments seemed to counter Fed Chairman Jay Powell's remarks from last week.
Meanwhile, markets also got a bit of a jolt Tuesday from remarks by John Williams, president of the Fed's NY regional bank.
The jitters helped drive demand for government bonds Tuesday, pushing prices higher. The Organization for Economic Cooperation and Development forecast that global growth would slow from 3.7 percent this year to 3.5 percent in 2019 and 2020. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks. The contract rose 30 cents on Tuesday to close at $53.25. The euro declined to $1.1330 from $1.1343. Hong Kong's Hang Seng added 0.3 percent. Germany's DAX lost 1.1 percent, while France's CAC 40 dropped 0.8 percent.