Stocks Tumble as China Retaliates with Tariffs
The stock market was headed for another pounding Friday after China retaliated with new tariffs on U.S. goods, raising fears that a trade war will tip the globe into a recession.
Futures tied to the blue-chip Dow Jones Industrial Average lost 1,533 points, or 3.7%. Future levels indicated the Dow would open official trading about 1,500 points lower. This follows a 1,679.39-point decline on Thursday. S&P 500 futures
lost 3.7% after the benchmark shed 4.84% on Thursday.
Nasdaq 100 futures dropped 4% as many tech companies have exposure to China.
China’s commerce ministry said Friday the country will impose a 34% levy on all U.S. products. This matches the tariff on Chinese goods coming into the U.S. unveiled by President Donald Trump on Wednesday.
“The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results,” said Michael Arone, SPDR chief investment strategist at State Street Global Advisors. “Investors are selling first and asking questions later.”
Companies with large exposure to China led declines in premarket trading, with Apple and Qualcomm down 5% and 6%, respectively. Tesla lost 5%, and Caterpillar shed 6%. Nvidia fell about 4%.
Bank stocks tumbled in the premarket as worries of a U.S. economic slowdown grew. Morgan Stanley dropped 5%, while Goldman Sachs shed 4.5%. Citigroup and JPMorgan Chase each slid more than 4%, while Wells Fargo dipped 5%.
The 10-year Treasury yield fell back below 4% on Friday as investors flooded into bonds for safety, pushing prices up and rates lower. JPMorgan late Thursday raised the odds of a recession this year to 60% from 40%.
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