When asked if there had been any change to the policy after remarks on Monday where he said that the US will get involved militarily to defend Taiwan, a self-governed island claimed by China, President Joe Biden said "No."

China’s Foreign Ministry warned the US not to underestimate its resolve on Taiwan following Biden’s comments a day before.

Market reaction

The renewed US-Sino geopolitical tensions over Taiwan are unlikely to bode well for the markets, adding to the tepid risk sentiment.

The S&P 500 futures are down 1.21% on the day while the US dollar index rebounds 0.16% so far.

Gold Price is trading almost unchanged on the day at $1,852, as of writing.