Stocks fell on Tuesday after President Donald Trump’s latest threat to China increased fears of an impending trade war between the world’s largest economies.
The Dow Jones Industrials dropped 287.26 points, or 1.2%, to 24,700.21, with Boeing, DowDuPont and Caterpillar as the worst-performing stocks in the index. The 30-stock index also erased all of its gains for the year and posted a six-day losing streak, its longest since March 2017.
The S&P 500 lost 11.18 points to 2,762.57, with materials, industrials and tech lagging.
The NASDAQ sank 21.44 points to 7,725.58. Both S&P and NASDAQ indexes briefly fell more than 1% earlier in the session.
Shares of some of the biggest chipmakers fell given their large exposure to China. Qualcomm and Nvidia both dropped at 0.9%. Semiconductor and semiconductor equipment companies have a revenue
Ford Motor, which also does a large amount of business in China, saw its stock pull back about 0.8%. Meanwhile, Caterpillar and Boeing— considered two bellwethers for trade tensions on Wall Street —both dropped at least 3.5%.
Shares of railroads and package shippers dropped on fears a trade war would slow the economy and reduce the amount of imported goods for them to ship around the country. FedEx and J.B. Hunt both dropped more than 1.5%. CSX lost 1.9%.
Trump asked the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs, at a rate of 10%. If China “refuses to change its practices” and insists on continuing with the new tariffs it recently declared, then the additional levies would be imposed on Beijing, Trump said Monday night.
Soon after, the Chinese Commerce Ministry issued a response, stating that the latest threat of more tariffs violates previous negotiations and consensus reached between both the U.S. and China. “The United States has initiated a trade war that violates market laws and is not in accordance with current global development trends,” the ministry said.
Prices for the benchmark for the 10-year U.S.Treasury gained, lowering yields to 2.89% from Monday’s 2.92%. Treasury prices and yields move in opposite directions.
Oil prices slid 78 cents to $65.07U.S. a barrel.
Gold prices lost $2.60 at $1,277.50U.S. an ounce.
This article provided by NewsEdge.