Stocks erased gains of 80 points in early trading on Tuesday as China retaliated against US trade measures, sparking concerns about escalating tensions between the two economic superpowers.
The move comes after the US imposed tariffs on $50 billion worth of Chinese goods in response to allegations that Beijing was stealing American intellectual property. China has vowed to retaliate with its own tariffs and other trade restrictions.
The Dow Jones Industrial Average fell by 0.8% to 26,842, while the S&P 500 slipped by 0.7%. The Nasdaq Composite dropped by 1.3%, with technology stocks bearing the brunt of the losses.
Investors are growing increasingly worried about the impact of trade tensions on global growth and corporate earnings. Many analysts had expected China to retaliate against US tariffs, but the speed and scale of its response has caught some off guard.
“This is a big surprise for many investors,” said Mark Martin, chief investment officer at Redwood Asset Management. “The market was expecting China to take some kind of action, but this is much bigger than we thought.”
Source: https://www.ft.com/content/973cb5df-75d3-4307-899c-e9add6b52477