Market Extra: Here’s the key question for U.S. investors about the trade skirmish with China

The last two weeks weren’t a picnic for U.S. stock market bulls, but Wall Street remains more resilient than Chinese equities. The question for investors is whether U.S. stocks can hold up if the U.S.-China trade spat escalates.

Based on past episodes, “investors in U.S. equities have only tended to worry about China in the past when that country’s stock market and currency have both fallen,” wrote economist Ingvild Borgen Gjerde at Capital Economics in a Thursday note. “Bearing this in mind, it is perhaps surprising that U.S. equities have held up quite well during the past two weeks.”

Indeed, the yuan dropped 3.4% against the dollar in June, for its biggest monthly decline since at least December 1998, The Wall Street Journal reported, citing Thomson Reuters data.

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