U.S. stocks tumble on latest Trump-China trade threats
- Author: David Armstrong Jun 22, 2018,
Jun 22, 2018, 6:59
Significant weakness was also visible among chemical stocks, as reflected by the 1.8 percent loss posted by the S&P Chemical Sector Index. The Russell 2000 index lost 10 points, or 0.6 percent, to 1,682. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index and the German DAX Index slumped by 1.1 percent and 1.2 percent, respectively.
Investors sought safer investments, such as high-dividend companies like utilities and companies that make and sell household goods.
Stocks are trading lower at midday Tuesday on fresh worries about a trade dispute between the USA and China, although they've recovered somewhat from an early slump.
Chicago Board of Trade front month soybean futures settled down 2.1 percent after falling as much as 7.3 percent, to the lowest spot price on a continuous chart since December 2008. Shares of large US companies with significant overseas business were hit especially hard.
Sixty-two percent of companies in all industries said they had less favourable market access in China than their Chinese competitors had in Europe. But Intel shares dropped 3.4 percent to $53.22 on Monday on news of a stock downgrade and investor concerns over tariffs. This approach to trade, economists said, is based on a false understanding of how the global economy works, one that also plagued American policy-makers almost a century ago. Apple was down 1.9 percent at $185.20 in afternoon trading in NY.
U.S. stock markets fell sharply on Tuesday morning, following similar drops across the world, as investors feared that escalating tensions could trigger an global trade war. The Russell 2000 index of smaller stocks is building on the record set Tuesday, up 11 points, or 0.7 percent, to 1,705. The S&P 500 and tech-heavy Nasdaq also fell close to 1%.
"There's definitely some element of pressure here as we go through the trade war fears, as well as the rhetoric for tariffs", said Sid Mokhtari, executive director of institutional equity research at CIBC.
But for U.S. importers looking to get tariff-hit cargo from China before the July 6 deadline, it could pay to use air freight instead. The president threatened that they would activate these additional taxes if China continues in its "unfair practices related to the acquisition of American intellectual property and technology".
Worldwide markets slumped, with China-focused stocks hard hit.
Oil prices, which were lower in early global trading, steadied ahead of an OPEC meeting where top suppliers are expected to agree to increase global crude supply. Benchmark U.S. crude fell 23 cents to $64.83 a barrel in electronic trading on the New York Mercantile Exchange.
The trade spat between President Donald Trump and China is heating up, with tariff threats escalating.
On Monday, the Trump administration responded with an unprecedented threat to levy a 10 percent tariff on $200 billion in Chinese products - a move that would put a large share of the $505 billion in products that the United States imports from China under tariffs.
China's retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.
The Australian dollar AUD= sank to a one-year low of A$ 0.7391 as the U.S.