Wall Street dips as trade war concerns take centre stage

US stocks fell on Thursday after the United States decided to impose metal import tariffs on Canada, Mexico and the European Union, sparking fresh concerns of a trade war with its top allies.

US Commerce Secretary Wilbur Ross told reporters on a telephone briefing that a 25% tariff on steel imports and a 10% tariff on aluminum imports from its allies would go into effect at midnight (0400 GMT on Friday).

Shares of Boeing fell 1.1% and Caterpillar declined 1.2%. The stocks were among the biggest drag on the Dow Jones Industrials.

Shares of US steel companies Steel Dynamics, AK Steel and US Steel gained between 3.4% and 7.4% and aluminum producer Alcoa rose 3.4%.

Renewed trade worries put an end to market optimism over fresh efforts in Italy to form a government.

Friction between the United States and its trading partners have roiled financial markets, especially after Trump in March decided to impose 25% tariff on steel imports and a 10% tariff on aluminum.

Adding to the trade worries was a report that President Donald Trump aimed to push German car makers out of the United States altogether, after launching a national security probe last week into car and truck imports.

At 9:50 a.m. EDT the Dow Jones Industrial Average was down 145.99 points, or 0.59%, at 24 521.79, the S&P 500 was down 8.97 points, or 0.33%, at 2 715.04 and the Nasdaq Composite was up 5.23 points, or 0.07%, at 7 467.68.

Ten of the 11 major index groups were trading lower with the technology stocks the only gainer.

General Motors surged 10.6% after Japan’s SoftBank Group decided to invest $2.25 billion in its autonomous vehicle unit.

Data showed that US consumer spending jumped 0.6% in April, the biggest gain in five months and above Reuters’ estimate of 0.4% rise, in the latest sign that economic growth was regaining momentum early in the second quarter.

Personal consumption expenditures (PCE), the Federal Reserve’s favored measure of inflation which excludes the volatile food and energy components, rose 0.2% in April.

That left the year-on-year increase in the so-called core PCE price index at 1.8%, below the central bank’s 2% target.

Among other stocks, struggling department store operator Sears Holdings slid 7.2% after its quarterly profit slumped nearly 30%.

Dollar General declined about 8% and Dollar General dropped 11.5percent after both discount retailers missed Wall Street estimates for their quarterly same-store sales.

Declining issues outnumbered advancers for a 1.58-to-1 ratio on the NYSE and by a 1.22-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs and three new lows, while the Nasdaq recorded 75 new highs and 13 new lows.