Stocks reverse course as trade-war risks reemerge.
U.S. stocks declined Friday, with the Dow reporting a triple-digit loss after President Trump announced he will move ahead with planned tariffs targeting Chinese goods.
Dow industrials (NYSEARCA:DIA) shed 84.83 points, or 0.3%, to close at 25,090.48. The majority of the Dow’s 30 index members finished in the red. Shares of materials, financials and energy companies were among the biggest laggards.
The broader S&P 500 Index (NYSEARCA:SPY) fell 0.1% to 2,779.42, with six of 11 sectors reporting declines.
The technology-driven Nasdaq Composite Index (NYSEARCA:QQQ) was knocked from record highs, falling 0.2% to close at 7,746.38.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) was up more than 6% before reversing gains later in the session. The so-called fear index settled at 12.12, where it was little changed.
The Trump administration announced Friday it will impose a 25% levy on Chinese goods for up to $50 billion, reigniting fears of a global trade war.
In a statement Friday, President Trump said the tariffs would impact Chinese goods “that contain industrially significant technologies,” though he did not specify what those products entailed. The decision comes “in light of China’s theft of intellectual property and technology and its other unfair trade practices.”
China had previously vowed to retaliate to the Trump administration’s protectionist policies, including cancelling prior commitments to purchase more U.S. goods.
The Final Word: Trade-war risks threaten to undo Wall Street’s recent run of good fortune as investors are generally averse to any sign of protectionism. It remains to be seen whether trade-war risks can be diffused or whether China will retaliate to Washington’s latest measures.