US stocks take dive on report of China tariff escalation
Trump administration threatening to slap new duties on all Chinese imports if no deal made next month
Trading in New York saw wild swings on Monday as stocks tumbled from early gains after news that the White House is ready to escalate a trade conflict with China dramatically.
Bloomberg reported that sources confirmed what had already been floated as a possibility by US President Donald Trump, namely that his administration will increase a list of tariffed Chinese products to include virtually everything that is shipped from America’s largest trading partner.
Major benchmarks were all down around 1% at the close, give or take, after clawing back some losses that saw the market approach correction territory earlier in the day.
The trade worries are just one of the factors that have weighed on US stocks in October. Higher interest rates, as well as skepticism that current valuations of tech companies are sustainable, have helped the Dow Jones Industrial Average and S&P 500 fall 7.7% and 9.4% respectively this month.
The S&P 500 has given up virtually all of its gains year to date, and the index would have fared much worse were it not for a handful of stocks. Four tech stocks accounted for 4.5% of the S&P’s gains as of last week, and those same stocks have helped pull the benchmark down in October.