The Dow sunk around 650 points early Monday, while the Nasdaq and S&P 500 also lost ground. This comes after China pledged to raise tariffs on $60 billion worth of imports in retaliation to last week's tariff increase from Washington. The Hang Seng was trading higher in positive territory.
The trade dispute escalated last week when The U.S. administration raised tariffs to 25 per-cent from 10 per-cent on some $200 billion worth of imported goods from China. The Dow ended the week 2.1 per-cent lower, its worst week since March 2019, despite a statement from the White House that negotiations were “constructive”. Talks closed with no agreement from either side.
Tech and bank stocks were hit the hardest. Chipmakers and tech companies have been weathering the storm as the trade dispute’s outcoming is feared to cause a slowdown in orders. Apple Inc. (NASDAQ:AAPL) opened lower and lost around 5 per-cent by midday, while Cisco Systems Inc. (NASDQ:CSCO) was roughly 3.8 per-cent lower.
The only silver lining was around safe-play holdings such as utilities.