US Markets Slump As Trade War Heats Up

Wall Street stocks plunged on Monday after China announced new tariff measures on the United States, reviving fears the months-long conflict could deteriorate further.

At the closing bell, the Dow Jones Industrial Average stood at 25,324, down 2.4 per cent.

The broad-based S&P fell 2.4 per cent to 2,812, while the tech-rich Nasdaq Composite Index tumbled 3.3 per cent.

"A US-China trade deal was pretty much priced into the market," said Sam Stovall, chief investment strategist at CFRA Research. "Now who knows what has to be accomplished before a deal can be reached?

"That is causing investors to bail out and say 'I don't know what is going to happen.'"

Boeing plunged 4.9 per cent. A spokesman for the company said Boeing was "confident the US and China will continue trade discussions and come to an agreement that benefits both US and Chinese manufacturers and consumers".

Other US companies with large China operations suffered big declines, including Apple, down 5.8 per cent, Caterpillar, down 4.6 per cent, Deere & Company, down 6.2 per cent and General Motors, down 3.5 per cent.

Apple also was hit by news the US Supreme Court will allow an antitrust lawsuit against the iPhone maker to go forward.

Alan Skrainka of Cornerstone Wealth Management said the selloff was a "tremendous overreaction" given that the portion of goods hit by tariffs is small in the context of the global economy. (AFP)

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