Futures fall after Trump proposes $100 billion more in tariffs on China

Alicia Cross
April 7, 2018

Investors were unnerved by President Donald Trump's threats of tariffs on an additional US$100 billion in Chinese imports as the U.S. president hit out at China's "unfair retaliation" to a prior Trump announcement of US$50 billion in tariffs on Chinese goods.

The Dow closed down 572 points, a drop of 2.3%, after President Trump threatened to escalate a confrontation with China over trade. Wall Street is getting more optimistic that a trade dispute between the US and China, the two largest economies in the world, will be resolved without too much pain. Johnson & Johnson sank $2.99, or 2.3 percent, to $127.72 and health insurer UnitedHealth dropped $59, or 2.6 percent, to $223.18.

The latest market swing came after President Donald Trump proposed tariffs on an additional $100 billion in Chinese goods.

Technology companies make a lot of their sales in Asia and they have struggled as Wall Street worries about a slowdown in global economic growth.

"Markets are forced to confront the idea that rates are going up and the stock market is not going to derail that process", McMillan said.

Aerospace giant Boeing fell the most in the Dow, dropping 3.4 percent.

Stocks are falling sharply again as trade tensions heat up between the USA and China. JPMorgan Chase gained $1.79, or 1.6 percent, to $112.22 and Citigroup added $1.16, or 1.7 percent, to $70.47.

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Also, the March non-farm payrolls report showed the USA adding 103K jobs, missing headline expectations by a wide margin.

If current gains for S&P 500 hold, it would be the best three-day run since Trump's election victory in November 2016.

Before the session started, a Labor Department report showed nonfarm payrolls increased by a smaller-than-expected 103,000 last month. Brent crude, used to price worldwide oils, rose 30 cents to $68.32 per barrel in London.

The June gold contract was up $2.40 to $1,339.70 an ounce and the May copper contract was down six cents to $3.00 a pound.

Bond prices rose, sending yields lower. Nike picked up 92 cents, or 1.3 percent, to $69.34. The euro rose to $1.2287 from $1.2256.

The dollar fell to 106.86 yen from 107.12 yen. About 268 of the S&P 500 components were lower.

The Dow Jones industrial average lost 152 points, or 0.6 percent, to 24,347.

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