ZH: US stocks sink after Taiwan fires at China drone

ZERO HEDGE writes:

Update(1053ET): Taiwan’s defense ministry has issued details of the live fire confrontation incident with a Chinese drone which happened near the Taiwan-controlled islands in the Dadan, Erdan and Shiyu areas.

“The three drones flew away towards the direction of Chinese city of Xiamen after the Taiwan military fired signal flares as warning Another drone entered restricted waters near Erdan area at 5:59pm and the Taiwan military fired warning shots to fend off the drone, which flew towards Xiamen at 6pm,” Bloomberg reports of the statement.

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The headline sparked anxiety across markets as fears remain of a broader ‘reunification’ war in the wake of Nancy Pelosi’s ultra provocative Taipei visit on Aug.2.

US equity markets erased all their overnight gains. Bond yields initially tumbled on a safe-haven bid, but bounced back after the US macro data.

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