Wall Street: Dow closes at lowest level in 2 years amid global rout - by William Watts

It’s been a brutal morning for stocks. China and Japan were closed, but the rest of Asia saw plenty of carnage which then translated into big falls for Europe.

U.S. stock index futures are pointing to a particularly ugly open that could take major indexes toward two-year lows. S&P 500 futures are down more than 31 points, or 1.7%, while Dow futures are off around 270 points.

Treasury bond prices are jumping, sending yields down hard. The 10-year yield has come off lows burt remains down more than 8 basis points at 1.5928%–not so far away from all-time lows in the mid 1.40s set back in mid-2012.

The yen soared and gold is up more than 3.6%, or $42 dollars, as the scramble for safety continues.

There seems to be no single catalayst. Some commentators are pinning the blame on Janet Yellen’s Wednesday testimony in which she didn’t pour much cold water on prospects for further rate hikes.

But that seems a stretch given that stocks took the testimony relatively well in stride during the testimony. Yellen, will be testifying again Thursday.

Meanwhile, this graphic tweeted out by Rareview Capital does a great job illustrating the vicious circle that seems to be driving market action these days:

Read more: Stock market live blog recap: Dow closes at lowest level in 2 years amid global rout - The Tell - MarketWatch

European economies face harsh headwinds from China

Headwinds from China again for European economies. As China’s financial markets remain relatively closed exposure for banks is limited, but trading is a different Hmatter.

Exporters to the country could be hit hard as China is a key buyer of industrial commodities including oil, copper and iron ore.

The country has become one of the European Union’s external trading partners in goods and it ranks second overall in terms of total trade. Germany is one of those states which is exposed.

“China is important for the world economy, definitely and once right now we see that China is losing momentum. That’s especially negative for Germany, exports and imports to China,” explained Robert Halver Head of capital market analysis at Baader Bank.

In 2014 Germany topped the European league table of exports to China which were valued at around 100 billion euros.

That compares to France where the trade was worth 20 billion euros. It was 14 billion for Italy and almost 5.5 billion for Spain.

Read more: European economies face harsh headwinds from China | euronews, economy