A closely watched gauge of emerging market equities headed into correction territory, the culmination of uncertainty over US trade policy and concerns about the outlook for Chinese economic growth.

The MSCI EM index closed 0.4 percent lower on Thursday at a four-month low of 1,066.47. That took the gauge’s decline since October’s nearly 20-month high beyond 10 percent, the threshold for a correction.

Emerging market stocks are under pressure in the last quarter of 2024 as Donald Trump wins the US presidential election and traders worry about the negative impact of his proposed tariffs and other policy that can be done by the country’s trading partners.

Chinese stocks have sold off in recent months not only because of the potential impact of US tariffs but also because Beijing’s economic stimulus package has fallen short of investors’ expectations. At more than 27 percent, Chinese equities represent the country’s largest weighting in the MSCI EM index.