Stocks plunge as President Trump plans to curb Chinese investment in U.S. companies.
U.S. stocks sold off Monday, with the Dow shedding more than 300 points amid reports that President Trump was planning to restrict Chinese investment in U.S. technology firms.
The Dow Jones Industrial Average (NYSEARCA:DIA) plunged 328.09 points, or 1.3%, to 24,252.80.
The broader S&P 500 Index (NYSEARCA:SPY) declined 1.4% to close at 2,717.07, with nine of 11 primary sectors contributing to the declines. Information technology and energy stocks were the biggest decliners, falling at least 2%.
Meanwhile, the technology-heavy Nasdaq Composite Index (NYSEARCA:QQQ) sold off 2.1% to end at 7,532.01.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) surged to multi-month highs as trade tensions rattled investor confidence. Wall Street’s fear index spiked nearly 30% to 17.77 on a scale of 1-100 where 20 represents the historic average. VIX topped out at 19.61, which is right around the historic average.
Various news outlets reported Monday that U.S. President Donald Trump was planning to curb Chinese investment in U.S. technology companies. According to The Wall Street Journal, the White House is also looking to block additional exports to China as part of an ongoing effort to minimize Beijing’s trade dominance and theft of U.S. intellectual property.
The Final Word: President Trump is expected to announce the new trade measures against China later this week. It remains to be seen how Beijing will respond. China has already committed to matching U.S. tariffs, which prompted the Trump administration to threaten more sweeping measures targeting Chinese exports.