Bengaluru: US stocks declined on Tuesday after President Donald Trump’s threat to move ahead with additional tariffs on Chinese goods dampened hopes of resolving the trade spat at the upcoming G20 Summit.
Ahead of a meeting where the leaders of the world’s two largest economies are widely expected to enter a trade deal, Trump told the Wall Street Journal he expects to raise tariffs on $200 billion in Chinese imports to 25 percent, calling it “highly unlikely" that he would accept China’s request to hold off on the increase.
“The market remains in a fragile state and because of that anytime tariffs come into the picture you have worries," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Investors are looking for some positive news out of the G20, but until there is a concrete announcement on tariffs, investors will remain jittery."
Apple Inc fell 1.6% and led the declines in the technology sector after Trump said tariffs could also be placed on laptops and iPhones imported from China.
Chipmakers, which have the highest revenue exposure to China among S&P 500 companies, also declined, with the Philadelphia SE Semicoductor index losing 0.79%.
Shares of Boeing, the single largest US exporter to China, fell 1.2% and fellow Dow component Caterpillar fell 1.6%, weighing on industrial stocks.
The downbeat mood comes after Wall Street started off the week on a high note, partly helped by retail stocks gaining on the hopes of a robust holiday season.
At 9:39 am EDT the Dow Jones Industrial Average was down 171.84 points, or 0.70%, at 24,468.40, the S&P 500 was down 12.37 points, or 0.46%, at 2,661.08 and the Nasdaq Composite was down 49.99 points, or 0.71%, at 7,031.86.
United Technologies Corp tumbled nearly 6%, the most on the benchmark S&P 500 index. The industrial conglomerate was up in premarket trading after it announced plans to separate into three companies.
All the major S&P sectors were in the red, with the technology sector’s 0.95% drop leading the slide.
Federal Reserve Vice Chairman Richard Clarida said the central bank should continue to gradually raise interest rates, but it is “especially important" to closely monitor new economic data as monetary policy is getting close to a neutral stance.
Fed Chairman Jerome Powell is scheduled to speak on Wednesday and his commentary will be closely watched for further clues on the path of interest rate hikes and signs of slowing economic growth in the face of rising trade tensions.
Declining issues outnumbered advancers for a 2.04-to-1 ratio on the NYSE and for a 2.37-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and one new lows, while the Nasdaq recorded six new highs and 49 new lows.