Washington (April 07, 2018): Stocks tumbled Friday as trade tensions between the United States and China heated up.
The Dow closed down 572 points, a drop of 2.3%, after President Trump threatened to escalate a confrontation with China over trade. It fell as much as 767 points earlier in the day. The S&P 500 and the Nasdaq each declined more than 2%.Friday’s losses wiped out gains for the week, and the Dow sank back into correction territory — 10% below its all-time closing high in January.
Trump said late Thursday that he was considering tariffs on $100 billion more in Chinese exports, which would triple what the United States is already planning.“The fear of a policy mistake on trade is increasing,” said Art Hogan, chief market strategist at B. Riley FBR.
All 30 companies on the Dow lost ground on Friday. Caterpillar (CAT), Boeing (BA) and Nike (NKE), giants with heavy exposure in China, were among the biggest losers in the index.
Earlier this week, the Trump administration announced plans for tariffs on $50 billion worth of Chinese goods in retaliation for China’s alleged theft of US intellectual property. Beijing fired back hours later by threatening tariffs on $50 billion worth of US goods, including cars, planes and soybeans.