Stocks slide after tariff threat
Fresh market jitters over the possibility of an escalation in the costly trade war between the U.S. and China pulled stocks broadly lower on Wall Street Monday.
The decline, which gradually lost momentum after an initial steep slump, came a day after President Donald Trump threatened to raise tariffs on goods imported from China. Trump complained that the trade talks between the two countries are moving too slowly.
Investors have been expecting Washington and Beijing to resolve their damaging trade dispute after both sides sent signals in recent months that talks were progressing. Hopes for an accord between the world’s two largest economies contributed to the big run-up in stock prices in the U.S. and China so far this year. The S&P 500 and Nasdaq hit all-time highs last week.
U.S. companies with heavy business interests in China bore the brunt of the selling Monday, particularly technology and industrial companies. Banks also fell sharply. Health care stocks rose.
Still, the wave of selling eased as the day went on, a sign that investors’ trade deal hopes haven’t dimmed entirely. Representatives from both sides were set to meet this week in Washington.
“You’ve seen that the selloff has been so far contained and part of that is the perception that the president has done this before,” said Marina Severinovsky, investment strategist at Schroders.
The S&P 500 dropped 13.17 points, or 0.4 percent, to 2,932.47. At one point, the benchmark index had been down 1.6 percent.
The Dow Jones Industrial Average fell 66.47 points, or 0.3 percent, to 26,438.48. It had been down as much as 471 points in the first few minutes of trading.
The Nasdaq slid 40.71 points, or 0.5 percent, to 8,123.29. The Russell 2000 index of small company stocks bucked the trend, adding 0.95 points, or 0.1 percent, to 1,614.98.