Wall Street kicked off the week with a sharp selloff on Monday after President Donald Trump said that the U.S. will hike tariffs on goods imported from China, casting doubt on recent optimism that the world's two largest economies were close to a resolution to their trade battle.
The Dow Jones Industrials dipped 281.28 points, or 1.1%, to 26,223.67
The S&P 500 sank 30.43 points, or 1%, to 2,915.21,
The NASDAQ Composite index tumbled 101.22 points, or 1.2%, to 8,062.77
Shares of Apple and Caterpillar dropped at least 2% each on fears of a trade war. Chipmakers were also hit hard with Nvidia and Advanced Micro Devices both losing more than 3%.
Trump said in a tweet Sunday afternoon that the current 10% levies on $200 billion worth of Chinese goods will rise to 25% on Friday. He also threatened to impose 25% tariffs on an additional $325 billion of Chinese goods "shortly."
Though trade negotiations between Washington and Beijing officials are set to resume on Wednesday, the president lamented that the progress is moving “too slowly” as China tries to re-negotiate terms of the deal.
The Wall Street Journal reported that China is considering cancelling its trade talks with the U.S. this week in light of Trump's latest threats. Citing a source, the Journal said Beijing had been surprised by the new threats.
Prices for the benchmark 10-year U.S. Treasury fell sharply, raising yields to 2.49% from Friday's 2.53%. Treasury prices and yields move in opposite directions.
Oil prices dipped 22 cents to $61.72 U.S. a barrel.
Gold prices slipped two dollars to $1,279.30 U.S. an ounce.