U.S. Stocks fell amid the Trade War with China
By Sruthi Shankar | June 15, 2018
(Reuters) – U.S. stocks fell on Friday after the United States announced tariffs on $50 billion worth of Chinese goods, spurring a promise of immediate and equivalent retaliation from Beijing.
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., June 4, 2018. REUTERS/Lucas Jackson
President Donald Trump said in a statement that a 25 percent tariff would be imposed on an initial list of strategically important imports from China from July 6 and vowed further measures if Beijing struck back.
In response, China’s Commerce Ministry said it planned to impose tariff measures of similar size and intensity. Beijing has published its own list that target $50 billion in U.S. goods, including soybeans, aircraft, and autos and chemicals.
Global financial markets have struggled since February in the face of signs Washington and Beijing were headed toward a trade war after several rounds of negotiations failed to resolve U.S. complaints about Chinese industrial policy, market access, and a $375 billion trade gap.
“It has gotten investors nervous,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “It’s going to probably mean a cautious and bumpy ride for the stock markets.”
Investors are also weighing the impact of tightening monetary policy by central banks on the equities market.
The U.S. Federal Reserve increased its key interest rate for the second time this year on Wednesday and hinted at the possibility of two more hikes by the end of 2018.
The European Central Bank weighed in on Thursday to say it would end its bond-purchase program at year-end, even if any interest rate hike was still distant.
At 9:51 a.m. ET the Dow Jones Industrial Average DJI was down 140.43 points, or 0.56 percent, at 25,034.88, the S&P 500 SPX was down 10.06 points, or 0.36 percent, at 2,772.43 and the Nasdaq Composite IXIC was down 38.09 points, or 0.49 percent, at 7,722.95.
Declining issues outnumbered advancers for a 2.27-to-1 ratio on the NYSE and for a 1.90-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and two new lows, while the Nasdaq recorded 37 new highs and 16 new lows.
