Stocks dive as US proposes more China tariffs
NEW YORK — Stocks ended the week the way they began it: tumbling as investors worry that tariffs and harsh words between the U.S. and China will touch off a trade war that derails the global economy. The latest drop came as the White House proposed tripling the amount of goods from China that will be subject to tariffs.
The stock market changed direction again and again this week as investors tried to get a sense of whether the trade dispute between the world’s two largest economies will escalate. On Friday technology companies, banks, industrial and health care stocks sank. The market didn’t get any help from a March jobs report that was weaker than expected.
With administration officials sounding conciliatory one day and hostile the next and the president quick to fire off yet another tweet, investors simply don’t know what the U.S. wants to achieve in its talks with China, said Katie Nixon, chief investment officer for Northern Trust Wealth Management.
“The process itself seems to be quite chaotic,” she said. “We’re not quite sure what the long-term strategy is.”
The Dow Jones industrial average dropped 572.46 points, or 2.3 percent, to 23,932.76. It’s down 10 percent from its record high in late January.
The S&P 500, which many index funds track, lost 58.37 points, or 2.2 percent, to 2,604.47. The Nasdaq composite slid 161.44 points, or 2.3 percent, to 6,915.11. The Russell 2000 index of smallercompany stocks dipped 29.63 points, or 1.9 percent, to 1,513.30.
‘Counterattack with great strength’
President Donald Trump’s administration spent the past few days reassuring investors that it’s not rushing into a trade war, and China’s government has done the same. But late Thursday, Trump ordered the U.S. Trade Representative to consider tariffs on another $100 billion in Chinese imports. China said it would “counterattack with great strength” if that happens.
Each nation proposed tariffs of $50 billion in imports from the other at the start of this week. Stocks plunged on Monday, but they rallied over the next few days as officials from both countries said they were open to talks and that the tariffs might never go into effect.
The Dow average, which contains numerous multinational companies including industrial powerhouses Boeing and Caterpillar, swung dramatically this week, with almost 1,300 points separating its lowest point Monday afternoon from its high late Thursday. It fell 0.7 percent for the week.