Dow dives as trade war with China escalates
Dow futures lost 380 pips after China retaliated
US stock futures fell sharply on Monday following an escalating trade war among the world’s largest economies. China retaliates against latest US move.
Dow Jones Industrial Average futures fell 380 pips at the open. S Futures&The P 500 and Nasdaq 100 also fell sharply.
Industrial leaders Caterpillar and Boeing fell 2.2% and 1.9% in premarket prices, respectively. Apple Inc. Shares Down 2.5% Premarket As Analysts Expected New Rates Proposed To Damage Demand on its flagship iPhone, while chipmakers Advanced Micro Devices Inc, Nvidia Corp, Micron Technology Inc and Intel Corp fell 1.4% -3.4%. Facebook Inc, Amazon.com Inc, Netflix Inc and Google Alphabet Inc lost 1.7% to 2.3% of their value.
China, which has always tightly controlled its currency, the yuan, has allowed it to fall to its lowest level against the dollar in more than a decade. The yuan is down below 7 per US dollar and is trading at 7.04. This is a sign that Beijing is willing to put up with even greater currency weakness, which could work to fuel a trade conflict with the United States..
Bloomberg News also reported that China has asked state-owned companies to suspend U.S. agricultural imports..
Global Stocks Selloff After China Retaliates in Trade War
The moves came after US President Donald Trump announced last week that the US would impose a 10 percent tariff on $ 300 billion in Chinese imports. The tariff will come into effect on September 1. Trump’s announcement comes after Chinese and US officials discussed trade issues early last week, as the two countries tried to reopen talks..
This news pushed S&P 500 for the worst weekly performance in a year. S&The P 500 fell 31% last week. The Dow had its second largest weekly drop in 2019 last week, down 2.6%.
On Monday, amid uncertainty, investors threw themselves into traditional havens such as Treasuries and gold. The underlying yield on 10-year Treasuries fell to 1.77% and hit its lowest level since November 2016. Gold Futures for December delivery up 1.1% to $ 1,473 an ounce.
European stocks also plummeted. The Stoxx 600 Index is down 2%. German Dax Down 1.8%, While French CAC 40 Pull Back 2.2%.