Dow shrugs off Trump threat

Stocks finish lower but avoid big losses.

It looked like it could have been a bloodbath, but by the end of trading Monday, investors largely shrugged off President Donald Trump’s trade threat to China over Twitter.

Stocks finished lower but pared much of their earlier losses. But futures slid again in after-hours trading after media reports suggested that tariff hikes were on the way.

“We have watched these blusterings in real time before. Trump’s tweets have a tendency to reverse themselves,” said Jamie Cox, managing partner for Harris Financial Group. “We have all been conditioned to wait and see.”

The Dow Jones Industrial Average dropped 66 points, or 0.25%, to end at 26,438 on Monday. The S&P 500 index lost 13 points, or 0.45%, to close at 2,932. The Nasdaq fell almost 41 points, or 0.5%, to finish at 8,123.

Reports after the market closed that U.S. Trade Representative Robert Lighthizer said the U.S. would enact tariff increases on Friday again sent stock futures down. Dow futures tumbled almost 300 points or 1.21% after the market closed, while S&P futures lost 1.21%.

On Sunday, Trump said in a tweet that he would raise tariffs to 25% from 10% on $50 billion in tech imports and $200 billion on other imports, starting Friday. He also suggested imposing a 25% duty on another $325 billion of imports that aren’t currently taxed.

He doubled down on his trade threats in an early tweet Monday.

“The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!” he wrote. His tweets come ahead of a trade discussion between the countries that was supposed to resume this week.