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Dow falls 350 points as trade war fears escalate

Wall Street has tried to ignore warning signs about a trade war for months. It can't any longer.The Dow sank a...

Posted: Jun 20, 2018 11:20 AM
Updated: Jun 20, 2018 11:20 AM

Wall Street has tried to ignore warning signs about a trade war for months. It can't any longer.

The Dow sank around 350 points, or 1.4%, on Tuesday. That put it in negative territory for the year and on track for its sixth straight day of losses. The S&P and the Nasdaq fell, too.

On Monday evening, President Donald Trump escalated trade tensions with China. He threatened to impose tariffs on an additional $200 billion worth of Chinese goods if Beijing follows through with its promise to retaliate against a previous round of US tariffs.

"Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States," Trump said in a statement.

Peter Boockvar, chief investment officer at Bleakley Advisory Group, blasted the president's latest attempt to gain Chinese concessions. "The strategy now seems a trade war of attrition," he said in a note to clients. "The means to that end is now going off the rails."

Companies that do a lot of business in China were among the biggest losers on the Dow on Tuesday. Boeing and Caterpillar fell close to 4% apiece, and Apple dropped 2%.

The commodities market also took a hit from the latest tariff threat. Soybeans, which are on Beijing's list of US goods to retaliate against, fell to their lowest level in more than two years. Corn and wheat futures dropped, along with iron and rubber.

Investors sought safety in telecommunications, utilities, and other high-dividend stocks like Verizon, Procter & Gamble and Johnson & Johnson. Bonds became more attractive to investors. The yield on the 10-year US Treasury bond ticked down to 2.88%. Yields move opposite to price.

Related: Where to invest in a trade war

There is no end in sight to the trade fight, as both sides continue to up the ante. The Chinese Commerce Ministry responded that it would "strike back hard" with "measures that match the US move in quantity and quality."

"This is just what we predicted -- a tit-for-tat trade war has erupted and American families are caught in the middle," National Retail Federation president Matthew Shay said in a statement Monday evening. "Higher prices for everyday essentials and lost jobs threaten to sap the energy out of the strong US economy."

White House trade adviser Peter Navarro sought to tamp down investors' worries on Tuesday. He argued that the dispute will have "relatively small effects."

But investors weren't listening. The VIX, Wall Street's so-called fear gauge, spiked 14% and CNNMoney's Fear & Greed Index, a measure of market sentiment, shifted from "Greed" to "Neutral" territory.

-CNN's Betsy Klein contributed to this story.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 143879

Reported Deaths: 3676
CountyCasesDeaths
DeSoto952799
Hinds9520193
Harrison6801105
Jackson6043116
Rankin521996
Lee477094
Madison4595102
Forrest360685
Jones341687
Lauderdale3340142
Lafayette312047
Washington3043106
Lamar273849
Bolivar237583
Oktibbeha237460
Lowndes227562
Neshoba2170113
Panola210347
Marshall206547
Leflore200389
Pontotoc192527
Monroe188877
Sunflower188754
Lincoln183664
Warren171757
Tate163049
Pike159958
Union159025
Copiah158840
Yazoo149538
Scott149429
Coahoma146742
Itawamba144433
Simpson143153
Alcorn142724
Pearl River142067
Prentiss138426
Grenada135844
Adams134148
Leake131643
Holmes124261
George121523
Tippah120430
Covington116434
Winston115824
Wayne115522
Hancock113337
Marion109046
Attala106133
Tishomingo105542
Newton102829
Chickasaw102132
Tallahatchie94727
Clarke88153
Clay86226
Jasper80421
Walthall73728
Montgomery71925
Calhoun71213
Stone71014
Carroll70114
Lawrence69814
Noxubee68917
Smith68616
Yalobusha67626
Perry63925
Tunica59519
Greene58222
Claiborne57416
Jefferson Davis53817
Humphreys52318
Amite50714
Benton48217
Quitman4766
Webster41614
Kemper40615
Wilkinson38422
Jefferson33511
Franklin3155
Sharkey30617
Choctaw3057
Issaquena1094
Unassigned00

Alabama Coronavirus Cases

Cases: 232506

Reported Deaths: 3457
CountyCasesDeaths
Jefferson30318491
Mobile19260356
Tuscaloosa12446148
Madison12204146
Montgomery12000232
Shelby971276
Baldwin819984
Lee750464
Morgan610447
Calhoun5964113
Etowah585764
Marshall579453
Houston503338
DeKalb460835
Cullman409636
Limestone400844
St. Clair396055
Elmore391061
Lauderdale378353
Walker348096
Talladega334042
Colbert294341
Jackson290524
Blount275436
Autauga261739
Franklin243633
Coffee230315
Dale225454
Dallas219631
Russell21753
Chilton216137
Covington212333
Escambia194031
Tallapoosa168590
Chambers167548
Clarke154919
Pike154714
Marion133935
Winston122523
Lawrence121436
Geneva11678
Marengo116424
Barbour116010
Pickens114118
Bibb113617
Butler113341
Randolph99521
Cherokee98524
Hale91531
Washington89818
Clay88823
Henry8386
Fayette83116
Lowndes78529
Monroe76811
Cleburne74214
Crenshaw70030
Macon69420
Bullock68919
Conecuh66814
Perry6686
Wilcox62318
Lamar6227
Sumter55322
Choctaw41713
Greene39917
Coosa3064
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