Dow drops on renewed trade worries
U.S. manufacturing also disappointed in November
U.S. markets got a rocky start to December, with the Dow Jones industrial average dropping 268 points amid poor manufacturing data and renewed global trade tensions that threaten to fizzle out recent record-breaking runs.
The trade picture darkened Monday after President Trump announced on Twitter that he would reinstate steel and aluminum tariffs on Brazil and Argentina. He accused the two nations of weakening their currencies to gain competitive advantage against the U.S.
Stock futures had been trending up before Trump’s early morning announcement. By the end of the day, the Dow Jones industrial average had shed about 268.37 points, or 0.9%. The Standard & Poor’s 500 index finished down 0.8% and the techheavy Nasdaq down 1.12%.
Meanwhile, U.S. manufacturing disappointed in November, according to Monday’s report from the Institute for Supply Management. Its manufacturing index dropped to 48.1% in November from 48.3% in October, coming in well below analyst expectations. Readings below 50% indicate business conditions are getting worse. Global trade “remains the most significant cross-industry issue,” Timothy Fiore, chair of the ISM’s manufacturing business survey committee, said in the report.
November was a blockbuster month for Wall Street, as strong earnings and trade hopes yielded 10 record-breaking closes for U.S. indexes. The Standard & Poor’s 500 is now up 25% for the year heading into a period that’s typically high-performing for stocks.
December could also bring progress on the trade front, as the terms of an agreement by the United States, Mexico and Canada could be finalized, while resolution on the first phase of a trade deal with China continues to flit in and out of reach.