SEVERE WX : Flood Warning View Alerts

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 12:20 PM
Updated: Jun 20, 2018 12:20 PM

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.

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 30901

Reported Deaths: 1964
CountyConfirmedDeaths
Marion9040531
Lake3191167
Cass15796
Allen121365
St. Joseph113234
Hendricks110365
Hamilton109291
Johnson1065102
Elkhart93827
Madison57658
Bartholomew46733
Porter46521
Clark45038
LaPorte38721
Tippecanoe3563
Jackson3531
Howard34417
Delaware34027
Hancock31527
Shelby31121
Floyd31138
Boone27935
Morgan25724
Vanderburgh2402
Decatur22131
White2128
Montgomery21114
Clinton2041
Harrison18321
Grant17820
Noble17420
Dubois1712
Greene16723
Warrick16326
Dearborn16221
Monroe15810
Henry1556
Lawrence14222
Miami1351
Vigo1357
Putnam1297
Jennings1264
Orange12222
Scott1153
Ripley1126
Franklin1068
Carroll882
Daviess8116
Steuben762
Newton7210
Wabash722
Kosciusko711
Wayne665
Marshall611
LaGrange592
Washington521
Jasper521
Fayette504
Fulton461
Rush452
Jefferson411
Jay410
Clay381
Pulaski380
Randolph373
Whitley342
Brown331
Sullivan311
Starke303
Owen301
DeKalb281
Knox240
Benton240
Crawford230
Perry230
Huntington222
Tipton221
Wells220
Switzerland190
Blackford191
Fountain172
Parke170
Posey170
Spencer141
Gibson132
Ohio130
Adams121
Warren121
Martin100
Union80
Vermillion80
Pike50
Unassigned0152
West Lafayette
Scattered Clouds
78° wxIcon
Hi: 88° Lo: 69°
Feels Like: 80°
Kokomo
Clear
78° wxIcon
Hi: 87° Lo: 66°
Feels Like: 80°
Rensselaer
Clear
77° wxIcon
Hi: 89° Lo: 66°
Feels Like: 79°
Fowler
Clear
77° wxIcon
Hi: 87° Lo: 66°
Feels Like: 79°
Williamsport
Clear
70° wxIcon
Hi: 86° Lo: 68°
Feels Like: 70°
Crawfordsville
Broken Clouds
66° wxIcon
Hi: 84° Lo: 68°
Feels Like: 66°
Frankfort
Overcast
70° wxIcon
Hi: 86° Lo: 67°
Feels Like: 70°
Delphi
Clear
77° wxIcon
Hi: 89° Lo: 68°
Feels Like: 79°
Monticello
Clear
77° wxIcon
Hi: 91° Lo: 67°
Feels Like: 79°
Logansport
Clear
79° wxIcon
Hi: 86° Lo: 67°
Feels Like: 81°
Warm Temperatures For Memorial Day
WLFI Radar
WLFI Temps
WLFI Planner

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