Dow slumps for 5th straight day amid Trump’s tough talk on tariffs
The Dow Jones Industrial Average fell for the fifth straight day on Monday as concerns about a global trade war following President Donald Trump‘s threat to impose hefty tariffs kept investors on the edge.
Trump on Monday apppeared to suggest that Canada and Mexico could win exemptions to the planned sweeping tariffs on steel and aluminum if the two countries sign a new NAFTA trade deal and take other steps.
The S&P 500 ended another rocky week on an upbeat note on Friday, but major indexes still posted their worst week of losses since early February after Trump promised tariffs on aluminum and steel and talked bullishly about “winning” a trade war economists say could decimate growth.
“The President just tweeted a while ago, sounding tough on trade with Canada and Mexico,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
WATCH: U.S. Republicans warn Trump over steel and aluminum tariffs
“Some of it will get passed on to consumers in terms of higher prices … It’ll add a little bit to inflation. But I think it’s more an uncertainty,” Brown added.
Eight of 11 S&P 500 indexes were lower on Monday, led by financials and information technology.
World stocks and emerging markets fell for the fifth straight day on Monday, with investors also worrying that Italian voters had flocked to anti-establishment and far-right groups in record numbers and had delivered a hung parliament.
Investors dumped stocks in favor of traditional safe havens including gold and the Japanese yen, with gold touching a near one-week high on Monday.
“Markets’ inability to regain confidence is likely to keep stocks defensive,” First Standard Financial Chief Market Economist Peter Cardillo said.
At 9:41 a.m. EDT, the Dow Jones industrial average was down 64.93 points, or 0.26 per cent, at 24,473.13, the S&P 500 was down 6.76 points, or 0.251184 per cent, at 2,684.49 and the Nasdaq Composite was down 20.10 points, or 0.28 per cent, at 7,237.76.
Shares in chipmaker Qualcomm dipped 1.6 per cent after the Committee on Foreign Investment in the United States (CFIUS) ordered the company to postpone an annual shareholder meeting, giving it more time to resist efforts by Broadcom Ltd to force through a $117 billion merger.
Shares of Clearside Biomedical jumped 55 per cent after the drug developer’s eye drug met the main goal in a late-stage study, while Dermira plunged 60 per cent after the company abandoned its acne drug.
Europe’s second-biggest insurer XL Group Ltd rose 30 per cent after being acquired by France’s AXA for $15.3 billion.
— Reporting by Ankur Banerjee and Sruthi Shankar in Bengaluru; editing by Patrick Graham and Sriraj Kalluvila
© 2018 Thomson Reuters