Stocks fall after U.S. tariff threats

NEW YORK — Global stock indexes sank Wednesday after President Donald Trump’s administration released a list of $200 billion in goods that could be hit with tariffs and China said it would retaliate. The dollar spiked and big exporters plunged.

Companies that sell computer chips, oil, basic materials and heavy machinery dropped after the Trump administration proposed a 10 percent tax on a wide list of imports. It is scheduled to make a decision on the potential tariffs after Aug. 31.

China’s government said it will take “firm and forceful measures” if the new tariffs are enacted. That response would likely include measures other than tariffs. Trump has threatened to put new taxes on almost everything the U.S. imports from China.

A four-day winning streak for the S& P 500 ended as the benchmark index lost 19.82 points, or 0.7 percent, to 2,774.02. The Dow Jones industrial average dropped 219.21 points, or 0.9 percent, to 24,700.75. The Nasdaq composite fell 42.59 points, or 0.5 percent, to 7,716.61. The Russell 2000, an index of smaller and more U.S.-focused companies, gave up 11.96 points, or 0.7 percent, to 1,683.66.

The S&P 500 had closed at a five-month high Tuesday.

Jack Ablin, chief investment officer for Cresset Wealth Advisors, said the tariffs can have big effects: A tariff on an import from one country can lead to broad price increases for similar items, and rising taxes and costs might cause companies to change their supply lines in less efficient ways.

“When you start adding all of that together, you end up with typically higher inflation and low productivity,” he said. “Higher inflation tends to rob consumers of their income, and lower productivity tends to rob companies of their profits.”

The new list of tariff targets from the U.S. trade representative includes vacuum cleaners, furniture and car and bicycle parts, but U.S.branded smartphones and laptops were excluded. Still, chipmakers, which make large portions of their sales in China, slumped. Nvidia fell 2.3 percent to $247.53 and Micron Technology lost 2.8 percent to $54.18.

Construction equipment maker Caterpillar lost 3.2 percent to $136.76 and farm equipment maker Deere lost 2.2 percent to $141.42.

The ICE U.S. dollar index jumped 0.6 percent, a large move. The dollar rose sharply against the Japanese currency, increasing to 112.04 yen from 111.28 yen. The euro fell to $1.1674 from $1.1745.

The stronger dollar hurts exporters because it makes U. S. goods and commodities more expensive in other markets. Crude- oil prices tumbled partly because of the rising dollar and partly because Libya said it will start exporting oil again, a move that will increase supplies.

Benchmark U.S. crude fell 5 percent to $70.38 a barrel in New York. Brent crude, used to price international oils, plunged 6.9 percent to $73.40 a barrel in London.

Airlines took sharp losses after American said it expects slower fare growth in the U.S. American Airlines slumped 8.1 percent to $ 35.96, and United Continental slid 3.4 percent to $68.88.

Twenty-First Century Fox raised its offer for European pay TV service Sky. Fox already owns 39 percent of Sky and wants to buy the rest, but rival Comcast has stepped in with its own bid. Fox says the new offer values Sky at $32.5 billion.

Fox lost 4 percent to $47.79. In the U.K., Sky stock fell 0.5 percent.