Tech stocks and growth exposed sectors slumped in overnight trading in an escalation of the trade conflict to US-imposed investment restrictions. Both Treasury and White House officials tried to hose down fears, with limited success. Bonds rallied, the US dollar trod water, and oil and industrial metals fell. Asia Pacific investors are bracing for a down day.

Investors may take heart that there is a possible market solution to trade difficulties. Harley Davidson announced overnight it will move production of the 40,000 bikes it sells a year in Europe out of the United States. Potential job losses in an iconic business situated in a political heartland may do more to end the rhetoric than any trade envoy.

Given yesterday’s regional sell down the impact of negative sentiment may lift over the trading day. US futures in their overnight session have moved into modestly positive territory. However any rallies are likely short lived while the risks of trade wars hang over markets.