Dow falls 2% as Trump escalates trade dispute with China1 min read . Updated: 23 Aug 2019, 10:57 PM IST
- Trump ordered US companies 'to immediately start looking for an alternative to China' in response to Beijing's threat to impose retaliatory tariffs on US goods
- The broad-based S&P 500 also slid 2% to 2,863.47
The Wall Street sell-off accelerated Friday afternoon after US President Donald Trump threatened new retaliation against China in response to Beijing's latest tariff announcement.
Near 1710 GMT, the Dow Jones Industrial Average was down more than 500 points, or two percent, at 25,732.44.
The broad-based S&P 500 also slid 2.0 percent to 2,863.47, while the tech-rich Nasdaq Composite Index sank 2.4 percent to 7,796.42.
President Donald Trump ordered U.S. companies "to immediately start looking for an alternative to China" in response to Beijing's threat to impose retaliatory tariffs on U.S. goods.
Trump gave no detail on how he might proceed with any such order, although he said he would be offering a response later on Friday.
The indexes were on course to give up their weekly gains made on hopes of stimulus measures from major central banks and governments as well as a solid batch of retail earnings.
"It's a fair reaction from the markets. I don't think anyone thought we'd get to this level," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
U.S. stocks had earlier recovered from their lows after Federal Reserve Chair Jerome Powell said the Fed would "act as appropriate" to keep the current economic expansion on track, supporting bets on a further decline in key borrowing costs.
"Interest rate cuts, while they help the economy, they're not going to be enough to offset a major global trade war. It seems that's the direction we're heading in," O'Rourke said.
While traders are still widely anticipating a 25 basis point cut from the Federal Reserve in September, expectations of a more aggressive 50 basis point cut rose to 10%, according to CME Group's FedWatch tool.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.