Effects of new tariff felt widely

Stocks slumped Thursday and bond prices spiked after President Donald Trump surprised markets with a new 10% tariff on $300 billion worth of goods from China beginning next month.

The news erased an early rally on Wall Street, leading to the market’s fourth straight loss. Bond prices surged, sending yields sharply lower, as investors sought safety.

The price of U.S. crude oil skidded nearly 8%, its biggest drop in more than four years and a signal that investors fear the economy could slow down.

Investors were taken off guard by the tariff announcement because the White House had said a day earlier that Beijing had promised to buy more farm goods. That came just as the latest round of trade talks were ending.

Companies that rely heavily on doing business with China took the brunt of the selling Thursday. Electronics retailer Best Buy went from a slight gain to a drop of 10.8% in heavy trading. Apple went from a gain of 1.4% to a loss of 2.2%.

Banks, industrials and consumer discretionary goods were among the hardest-hit sectors. Bank of America dropped 3.9%, Boeing slid 2% and Gap tumbled 7.9%.

Energy stocks also fell sharply as crude oil prices sank. Exxon Mobil fell 2.6%.

Utilities and real estate stocks rose as traders shifted money into more stable, high-yield stocks.

Prices for U.S. government bonds rose sharply, sending yields lower. The yield on the 10-year Treasury fell to 1.90%, the lowest level since the 2016 election.

Meanwhile, the yield on the two-year Treasury note slid to 1.73% from 1.87% late Wednesday, a very large move.