U.S. stocks closed sharply lower Monday, with the S&P 500 and the Dow logging their worst day since Jan. 3, as China moved to raise tariffs on U.S. goods and take other retaliatory measures after Washington last week increased duties on Chinese imports.
How did the benchmark indexes fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -4.06% tumbled 617.38 points, or 2.4%, to 25,324.99 and the S&P 500 index /zigman2/quotes/210599714/realtime SPX -3.37% dropped 69.53 points, or 2.4%, to 2,811.87. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -3.79% sank 269.92 points, or 3.4%, to 7,647.02, marking its biggest one-day loss for 2019.
What drove the market?
Tensions that drove volatility for stocks last week returned as investors weighed an escalating tariff fight that could pose risks to the U.S., Chinese and global economies.
After raising tariffs on $200 billion worth of annual Chinese imports to 25% from 10% on Friday, the Trump administration said it was ready to impose higher tariffs on another roughly $300 billion of goods, or nearly all the remaining products Americans buy from the world’s second-largest economy.
On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.
In several tweets over the weekend and early Monday, President Donald Trump argued that the U.S. was in an advantageous position on trade, though White House economic adviser Larry Kudlow admitted Sunday that “both sides” will feel the pain.
Chinese state-ran media over the weekend published several editorials blasting the U.S. stance and vowed that Beijing would stand firm in the talks.
Stocks did come off session lows after Trump told reporters during an afternoon Oval Office meeting with Hungarian Prime Minister Viktor Orban that he would meet Chinese President Xi Jinping next month at a Group of 20 summit and that he hadn’t made a decision on whether to impose tariffs on another swath of Chinese goods.