US stocks tumble as US and China spar over trade threats

New York — Wall Street stocks tumbled in opening trading on Tuesday as fresh tariff threats by the US and China against each other exacerbated trade war fears.

The broad-based S&P 500 dropped 0.7% to 2,753.79, and the tech-rich Nasdaq Composite Index also shed 0.7% to 7,690.81.

US President Donald Trump said late on Monday that he had directed US Trade Representative Robert Lighthizer to target $200bn worth of Chinese imports for a 10% levy, citing China’s “unacceptable” move to raise its own tariffs.

This prompted a sharp response from Beijing, with China’s commerce ministry accusing the US of “extreme pressure and blackmail”. “If the US acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures,” the ministry said.

Trade-war fears had ebbed somewhat in recent weeks after pressuring stocks earlier in the spring. But analysts said markets remained guarded over the increasingly harsh rhetoric.

“Until this point, the US equity market has done a remarkable job shaking off any trade-war jitters,” said Briefing.com analyst Patrick O’Hare. “That understanding, however, could leave it vulnerable to an outsized loss if the resilience many participants expect it to show again in the face of negative-sounding trade headlines doesn’t persist.”

AFP