SEVERE WX : Flood Warning View Alerts

Dow plunges 724 points as trade war fears rock Wall Street

Trade war fears rocked Wall Street on Thursday after President Trump launched a crackdown on China.The Dow plu...

Posted: Mar 23, 2018 6:55 AM
Updated: Mar 23, 2018 6:55 AM

Trade war fears rocked Wall Street on Thursday after President Trump launched a crackdown on China.

The Dow plummeted 724 points, or 2.9%, underlining mounting concerns among investors about looming tariffs on China. It was the fifth-largest point decline in history and the market's worst day since the extreme turmoil of early February.

The S&P 500 dropped 2.5% and the Nasdaq 2.4%.

"A global trade war, whether it's real or perceived, is what's weighing on the market," said Ian Winer, head of equities at Wedbush Securities. "There's this huge uncertainty now. If China decides to get tough on agriculture or anything else, that will really spook people."

Trump announced tariffs on about $50 billion worth of Chinese imports on Thursday afternoon. It's not clear which products will be hit, but the action is aimed at curbing China's troubling theft of US intellectual property.

"We have a tremendous intellectual property theft situation going on," Trump said. He also described the US trade deficit with China as "out of control."

Related: Why Trump's tariffs on China are a big deal

China wasted little time in threatening to retaliate against the United States, underlining the risk of a tit-for-tat escalation that hurts global trade.

Beijing warned on Thursday it will "certainly take all necessary measures to resolutely defend" itself. China didn't specify how it will respond, but US crops like soybeans are likely to be in the crosshairs.

"There is a lot of panic selling," said Rich Guerrini, CEO of PNC Investments. "Are the tariffs a means of negotiating? There's a decent chance of that, but it's too early to tell."

CNNMoney's Fear & Greed Index, a measure of market sentiment, dropped further into "extreme fear." The VIX volatility index soared 22%, though it remains well off the elevated levels of early February.

Wall Street's biggest fear is a trade war, according to a recent survey of fund managers by Bank of America Merrill Lynch. The survey, released this week, found that for the first time since January 2017 the threat of a trade war topped inflation as the biggest risk to markets.

"What does this evolve into?" asked Mark Luschini, chief investment strategist at Janney Capital. "Should it denigrate into something that impairs business sentiment, that can feed into the economy and slow job growth."

The biggest losers on the Dow on Thursday included stocks with significant exposure to China: Caterpillar, 3M and Boeing.

Michael Block, chief strategist at Rhino Trading Partners, said in a report that Trump's tariff plan "has markets and the world at large freaking out a little."

The trade crackdown is a big deal because the United States and China are the world's two biggest economies. A major slowdown in trade could darken the otherwise bright economic outlook.

China is a major buyer of US crops, and Americans purchase tons of Chinese-made products. China is also America's biggest creditor, owning more Treasuries than any other nation.

Some market analysts questioned the wisdom of broad tariffs to tackle the very real problem of intellectual property theft.

"Isn't there another way to deal with this that is more targeted?" Peter Boockvar, chief investment officer at The Bleakley Advisory Group, wrote in a report. "The American consumer again will be the pawn that pays for this."

The trade worries could prove overdone if tensions between the United States and China ease.

Initial concerns about Trump's tariffs on aluminum and steel relaxed after the administration softened its stance by offering exemptions for Canada and Mexico. The United States later granted tariff exemptions for major allies like the European Union, South Korea and Australia.

That news didn't sit well with steel and aluminum makers. U.S. Steel plunged 9% and Alcoa dropped 5%.

Nervousness on Wall Street wasn't eased by the latest White House drama. The market fell further after Trump's lead lawyer, John Dowd, resigned from the president's personal legal team handling the Russia investigation.

Trump has recently taken a more aggressive stance against Special Counsel Robert Mueller. The market would probably fall sharply, at least at first, if Trump were to fire Mueller, analysts say.

West Lafayette
Overcast
55° wxIcon
Hi: 62° Lo: 56°
Feels Like: 55°
Kokomo
Overcast
56° wxIcon
Hi: 61° Lo: 55°
Feels Like: 56°
Rensselaer
Overcast
50° wxIcon
Hi: 59° Lo: 50°
Feels Like: 50°
Fowler
Overcast
50° wxIcon
Hi: 60° Lo: 52°
Feels Like: 50°
Williamsport
Overcast
53° wxIcon
Hi: 62° Lo: 55°
Feels Like: 53°
Crawfordsville
Overcast
57° wxIcon
Hi: 62° Lo: 57°
Feels Like: 57°
Frankfort
Overcast
57° wxIcon
Hi: 62° Lo: 55°
Feels Like: 57°
Delphi
Overcast
51° wxIcon
Hi: 60° Lo: 54°
Feels Like: 51°
Monticello
Overcast
51° wxIcon
Hi: 59° Lo: 52°
Feels Like: 51°
Logansport
Overcast
55° wxIcon
Hi: 59° Lo: 51°
Feels Like: 55°
Near Record Heat On The Way
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 150664

Reported Deaths: 4008
CountyConfirmedDeaths
Marion24697784
Lake13220352
St. Joseph8877159
Elkhart8469132
Allen7880222
Hamilton5962113
Vanderburgh559360
Tippecanoe354714
Monroe320738
Hendricks3183130
Johnson2995128
Porter297848
Clark285461
Delaware282074
Vigo252637
Madison229593
Cass222021
LaPorte215557
Warrick188464
Kosciusko176823
Floyd174867
Howard158866
Bartholomew139758
Dubois135125
Marshall132526
Henry122628
Grant120939
Wayne119327
Boone118848
Hancock114145
Noble113533
Jackson108713
Morgan92240
Dearborn91628
Daviess84033
Gibson83411
Clinton81616
Shelby79429
Lawrence78534
LaGrange76715
Harrison74024
Putnam71016
Knox70310
DeKalb69411
Posey6796
Steuben6008
Fayette58517
Miami5845
Montgomery57222
White56815
Jasper5624
Greene51837
Scott50813
Decatur49839
Adams4725
Clay4346
Whitley4316
Sullivan42812
Ripley4228
Wells4155
Starke3937
Wabash3919
Orange38725
Huntington3785
Spencer3706
Franklin36525
Jennings36013
Washington3592
Randolph3398
Fulton3362
Jefferson3305
Pike31913
Carroll31413
Perry29514
Jay2876
Fountain2863
Tipton26823
Parke2203
Newton21811
Vermillion2181
Rush2044
Owen2021
Martin1950
Blackford1923
Crawford1491
Pulaski1471
Brown1303
Ohio1227
Benton1070
Union1040
Switzerland890
Warren751
Unassigned0233

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events