After China retaliates with higher tariffs, Dow plunges 617 points
The Dow plunged 2.1% on Monday after China said it will raise tariffs in retaliation to last week's tariff increase by the United States. China hiked its tariffs on $60 billion of imports from the U.S.
The US stocks ended the day sharply lower. The Dow closed down 617 points after falling to 719 points earlier in the day. The S&P 500 (SPX) dropped 2.4% and the Nasdaq (COMP) fall 3.4%.
Therefore, The Dow and S&P 500 had their worst day since January 3, according to Refinitiv. The Nasdaq had it’s the worst day of 2019 and biggest one-day drop since December 4, 2018.
Only a single Dow stock, Procter and Gamble, was positive (by a dime). In the S&P 500, only a few dozen companies had moved higher, most of which were in the utility sector, and it usually doesn`t react to big broad market moves.
The Russell 2000 Index of small-cap stocks fell into correction territory as it has dropped more than 10% from the August 2018 high.
European stocks closed lower across the board. There is the same situation with Asian stocks. On Monday the Shanghai Composite (SHCOMP) ending trading down 1.2 %.
At the beginning of the week Geng Shuang, a spokesperson for the Ministry of Foreign Affairs, told that China will never yield to external pressure and the country is determined to protect its trade rights.
Athanasios Vamvakidis, Bank of America strategist, said: «We still believe that both countries have strong incentives to compromise and the authorities are well aware of what is at stake for their economies otherwise».