Share

Dow ends 2.9% lower as Trump China tariffs spur selloff

New York - Wall Street stocks plunged more than 700 points on Thursday after President Donald Trump hit China with tariffs on up to $60bn of goods, reviving fears of a trade war.

The Dow Jones Industrial Average fell 2.9% to close at 23 957.89, near the lowest point of a rocky session.

The broad-based S&P 500 dropped 2.5% to end the day at 2 643.69, while the tech-rich Nasdaq Composite Index fell 2.4% to finish at 7 166.68.
Saying it would be the "first of many" trade actions, Trump signed a presidential order to retaliate for China's "theft" of American intellectual property.

Beijing has vowed to defend its interests, setting the stage for dreaded tit-for-tat conflict that analysts fear could harm both countries as well as the global economy just as it is recovering.

"The stakes have been raised, especially now that it appears that President Trump is singling out China," said Jack Ablin, chief investment officer at Cresset Wealth Advisors.

"Considering China is one of the largest purchasers of US Treasuries that has sent shivers across the stock and bond markets."

Analysts also cited other factors behind Thursday's big drop, including unease over Federal Reserve's plans to raise interest rates under new chairman Jerome Powell, and worries that a data scandal involving Facebook could spur heavy-handed regulation of the fast-growing technology sector.

Investors also took note of news of the departure of John Dowd, a top lawyer on Trump's team in the Russia investigation led by special counsel Robert Mueller.

The Mueller investigation "went from being noise to being a market driver when Mueller subpoenaed the Trump organisation documents," said Art Hogan, chief market strategist at Wunderlich Securities, who described the subpoena as a "red line" for the market.

"Now we've crossed a red line... and mix into that narrative the fact that you have the legal team for Trump moving around a little bit," Hogan said. "There's concern."

Multinationals that rely heavily on China were among the bigger losers. Boeing and Caterpillar fell more than five percent and General Motors lost 3.3%.

Banking shares fell on a pullback in yields on the 10-year US Treasury bonds. The move implies interest rates will not rise as fast as expected, crimping bank profits.

JPMorgan Chase, Bank of America and Citigroup all lost more than 2%.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.02
-0.6%
Rand - Pound
23.97
-0.3%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,196.05
+0.1%
Silver
24.45
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,848
+0.3%
All Share
74,067
+0.2%
Resource 10
56,251
+1.1%
Industrial 25
103,518
+0.2%
Financial 15
16,466
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders