Dow drops 250 points on Trump's tariffs

Wall Street's trade war fears are back.President Trump's move to impose tariffs on steel and aluminum from Can...

Posted: Jun 1, 2018 5:19 AM
Updated: Jun 1, 2018 5:19 AM

Wall Street's trade war fears are back.

President Trump's move to impose tariffs on steel and aluminum from Canada, Mexico and the European Union drove the Dow down 252 points on Thursday, or 1%. The S&P 500 and the Nasdaq lost 0.7% and 0.2% respectively.

Trump is placing a 25% tariff on imported steel and 10% on imported aluminum. The tariffs will go into effect at midnight.

Investors worry that trade restrictions will raise costs and dent profits for companies that rely on the materials to produce their goods.

Wall Street is also on edge about retaliation.

Stocks plunged after Canadian Prime Minister Justin Trudeau announced steel and aluminum tariffs against the United States. Europe and Mexico also announced plans for countermeasures.

In addition, the Trump administration is pushing ahead with plans for tariffs on $50 billion worth of Chinese goods as punishment for intellectual property theft.

"Uncertainty surrounding tariffs on Chinese imports is a source of concern for some retailers that have operations overseas or use imported goods," the Federal Reserve Bank of Cleveland said in a report on Wednesday.

The stock market is having a turbulent week. The Dow lost nearly 400 points on Tuesday on fears that political turmoil in Italy could bring chaos in the eurozone. It made up almost all of that loss on Wednesday.

On Thursday, 29 out of 30 companies on the Dow lost ground.

Caterpillar was the worst performer, shedding 2%. Caterpillar executive Amy Campbell warned in March that tariffs would be a "negative" for selling the company's construction and mining equipment overseas.

Banks also struggled. Goldman Sachs and JPMorgan Chase fell as investors sought a haven in the bond market. The yield on the 10-year US Treasury dropped slightly to 2.82%. Lower yields make it more difficult for banks to make money from loan interest.

At the same time, steel and aluminum stocks spiked. The tariffs are designed to make US companies' production more competitive against foreign steel.

Webco, a steel tubing manufacturer, led the charge Thursday, surging 6%. US Steel jumped 2%. Nucor, the largest American steel maker, also inched up. Aluminum producer Century Aluminum moved ahead 2%.

Full tariffs are the "best case outcome" for American steel and aluminum producers, said Moody's analyst Michael Corelli.

Canada, Mexico and the EU made up 50% of US steel imports in 2017, according to the Peterson Institute for International Economics.

The possibility of tariffs, a healthy economy and higher oil prices have pushed up steel prices 35% since the beginning of the year.

Companies rushed to squeeze in overseas steel before any trade barriers took effect, but imports slowed in May. Corelli expects the tariffs to curb demand from overseas in the coming months. He cautioned that American companies can't completely replace lost foreign production.

"There will still be imports that will be needed," he said.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 315026

Reported Deaths: 7257
CountyCasesDeaths
DeSoto21684260
Hinds20385416
Harrison17973309
Rankin13650278
Jackson13456246
Madison10130217
Lee9988174
Jones8388163
Forrest7701152
Lauderdale7198240
Lowndes6411148
Lamar624686
Lafayette6210119
Washington5342134
Bolivar4804132
Oktibbeha463298
Panola4601107
Pearl River4524146
Marshall4454103
Warren4397121
Pontotoc421172
Monroe4120133
Union411276
Neshoba4033176
Lincoln3972110
Hancock380287
Leflore3500125
Sunflower336490
Tate335484
Pike3330105
Scott316773
Alcorn313670
Yazoo311870
Itawamba300877
Copiah297865
Coahoma295979
Simpson295388
Tippah289068
Adams288682
Prentiss280360
Marion269680
Leake268673
Wayne262941
Grenada261987
Covington260381
George249448
Newton246963
Winston227881
Tishomingo227567
Jasper221148
Attala214473
Chickasaw208457
Holmes189174
Clay185654
Stone183033
Tallahatchie179041
Clarke178180
Calhoun170932
Yalobusha164838
Smith162734
Walthall134345
Greene130633
Lawrence129324
Montgomery127242
Noxubee126734
Perry126338
Amite123142
Carroll121929
Webster114532
Jefferson Davis107233
Tunica105726
Claiborne102530
Benton100125
Humphreys96733
Kemper95828
Franklin83923
Quitman81116
Choctaw76418
Wilkinson67631
Jefferson65728
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 540267

Reported Deaths: 11038
CountyCasesDeaths
Jefferson798791529
Mobile41295809
Madison35175506
Tuscaloosa25932455
Shelby25309249
Montgomery24736593
Baldwin21422310
Lee15997172
Calhoun14577319
Morgan14431280
Etowah13927353
Marshall12280225
Houston10650282
Elmore10158206
Limestone10075151
St. Clair9955245
Cullman9773194
Lauderdale9465243
DeKalb8866188
Talladega8344176
Walker7261278
Autauga7010108
Jackson6840112
Blount6776139
Colbert6322135
Coffee5583118
Dale4878113
Russell445938
Chilton4383113
Franklin426382
Covington4138118
Tallapoosa4044153
Escambia395177
Chambers3598123
Dallas3569153
Clarke351561
Marion3140101
Pike312077
Lawrence303698
Winston275873
Bibb264864
Geneva254178
Marengo249865
Pickens234862
Barbour232056
Hale224078
Butler219069
Fayette213162
Henry190043
Cherokee184845
Randolph182542
Monroe178241
Washington167839
Macon161350
Clay157257
Crenshaw153657
Cleburne149641
Lamar143336
Lowndes140753
Wilcox127430
Bullock123342
Conecuh110829
Coosa109228
Perry107826
Sumter105032
Greene92634
Choctaw61024
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Your Tuesday comes with more clouds and rain chances, though a few areas of sunshine and warmth are possible at times in the afternoon. Though all areas could see some rain today, the majority of this rainfall will be found in our western counties.
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