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Global growth fears hit US stocks; US yields at nearly 3-year low

New Zealand, India and Thailand cut rates amid growth fears.

US 10-year yields at nearly 3-year low level.

➤ Yuan weakness back in focus.

➤ Safe havens gain.

U.S. stocks tumbled and safe havens gained amid mixed trade signals and yuan weakness, as three more central banks joined the monetary policy easing spree to counter growth concerns.

The S&P 500 index was down 1.8% around 9:50 a.m. ET, and the Nasdaq 100 index was trading 1.2% lower.

White House economic adviser Larry Kudlow told CNBC that Washington expects to meet with Chinese representatives in September, saying that President Donald Trump would like to continue negotiations. He added that "things could change with respect to the tariffs."

Separately, the U.S. set preliminary duties of around 230% on the imports of kitchen cabinets and bath vanities from two Chinese companies.

Asian equities largely extended losses, with the Shanghai SE Composite and Japan's Nikkei 225 declining 0.3% each at market close. Hong Kong's Hang Seng ticked up 0.1%.

In Europe, the FTSE 100 was little changed, while France's CAC 40 rose 0.3% and Germany's DAX climbed 0.4%. Shares of Commerzbank AG and Glencore PLC fell 5.6% and 4.1% in Germany and London, respectively, following their earnings reports.

In the bond market, the yield, which moves opposite to bond prices, on 10-year U.S. Treasurys declined 10 basis points to 1.607% around 10 a.m. ET, the lowest level since September 2016.

The yield on 10-year German bonds lost 7 basis points and that on 10-year Italy government bonds shed 7 basis points as the country's deputy prime minister Matteo Salvini said the government would be unable to limit its budget deficit below 2%.

Among currencies, the Chinese yuan weakened 0.6% against the greenback to 7.0641 per dollar, as the People's Bank of China set the daily yuan reference rate at 6.9996 per dollar. The central bank reportedly assured foreign exporters yesterday that the yuan would not weaken significantly.

The dollar index, which measures the U.S. currency's performance against a basket of major peers, was down 0.2%. St. Louis Fed President James Bullard said more rate cuts from the Federal Reserve may be necessary at some point, but the Fed should step back and evaluate how its shift in policy this year affects the economy.

The Indian rupee rose 0.4% against the dollar after the Reserve Bank of India cut its repo rate for the fourth time in a row, by 35 basis points to a 9-year low of 5.40%. The baht fell 0.3% against the dollar as the Bank of Thailand unexpectedly lowered its policy rate by 0.25 percentage points to 1.50%.

Meanwhile, the New Zealand dollar tumbled 1.4% as the Reserve Bank of New Zealand cut its base rate by a bigger-than-expected 50 basis points to a new record low of 1%, while keeping the door open for further easing.

Ipek Ozkardeskaya at the London Capital Group wrote that the surprise rate cut from the New Zealand central bank can fuel expectations of a similar size cut from the Fed.

The euro gained 0.3% versus the dollar as data showed German industrial production declining more than expected in June. Sterling was little changed while the Japanese yen was up 0.8% against the dollar.

In commodities, Brent crude sank 3.6% to $56.84 per barrel. Gold added 2.4%.

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The day ahead:

10:30 a.m. ET – U.S. EIA petroleum status report

3 p.m. ET – U.S. consumer credit (Econoday consensus: $16 billion)