U.S. stocks fell sharply Monday morning as China moved to raise tariffs on U.S. goods and take other retaliatory measures after Washington last week increased duties on Chinese imports and both sides appeared to harden their positions.
How did the benchmark indexes fare?
The Dow Jones Industrial Average fell 538 points, or 2.1%, to 25,416, while the S&P 500 index dropped 61 points, or 2.1%, to 2,821. The Nasdaq Composite Index slid 224 points, or 2.8%, to 7,694.
What drove the market?
Trade tensions that drove volatility for stocks last week were rebooting Monday, as investors confronted the prospect that a U.S.-China tariff deal could take longer than anticipated, if a pact occurs at all. Talks in Washington ended Friday without an agreement.
After raising tariffs on $200 billion worth of annual Chinese imports to 25% from 10% on Friday, the Trump administration said it was ready to impose higher tariffs on another roughly $300 billion of goods, or nearly all the remaining products Americans buy from the second-largest economy.
On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%. Hu Xijin, editor in chief of China’s Global Times, a daily Chinese tabloid with ties to the Communist Party, reported on Twitter Monday morning that China may take further steps in the coming days and weeks.
SOURCE: CHRIS MATTHEWS and BARBARA KOLLMEYER