Wall Street Falls for Retaliation by China to US Sanctions: Dow Jones, S&P 500, Nasdaq Analysis
Stocks fell sharply on Monday, posting their worst declines since early January, after China said it would raise tariffs of up to 60 billion US dollars in US imports to 25% in response to the collapse of talks trade between the two largest economies in the world.
China said that the tariff increase in about five thousand product groups will come into effect on June 1st. Last week, USA It also raised tariffs to $ 200 billion of imports made from China to 25%.
The recent escalation in commercial tensions between the US and China is making its actions worse, since the increase in tariffs in retaliation could trigger a full-fledged trade war. Investors are increasingly concerned that a rebound in earnings expected in the second half will now evaporate as President Trump's threat to the tariff, the remaining $ 325 billion in Chinese imports disproportionately go to consumer products such as iPhones, which represents a greater threat to the US economy driven by consumption, according to specialists.
As a result, the most affected was Apple, whose shares fell by 5% as investors are concerned about the impact of China's tariffs on the technology giant.
Trump for his part confirmed that he plans to meet with Chinese President Xi Jinping and Russian President Vladimir Putin at the G-20 summit in Japan in late June, CNBC reported.
In general, the market felt the devastating effects of the commercial war and the Dow Jones index fell -2.38%, losing more than 600 points, to close the day with 25324.99 points.
The S & P 500 index also fell sharply, falling 81 points to close with 2806.38 points, down 2.79%.
Finally the Nasdaq was severely hit by the Chinese sanctions, given the large number of technology companies that depend on that country for the manufacture of their products such as Apple Inc. In short, the index fell almost 300 points to close at 7311.50 units, -3.93%.
The rest of the markets and main financial indexes worldwide also reacted to the downside, with the main ones falling between half a percentage point and almost two percentage points.
In the energy market, the devastating effects of the trade war were also felt. Texas oil, WTI, fell 1% and closed at $ 61.04 a barrel.
Oil was pushed lower by the fall in stocks and other assets on the New York Stock Exchange.
For its part, the Brent fell by 0.60% and closed up to $ 70.19, motivated by the same reasons that basically drove down its US pair.
Although oil had rebounded during the half session due to the attack in the Middle East on Saudi oil workers, the impositions of China on American imports had more weight at the end of the day to send the price backwards.
As expected, Gold rose during today's session, motivated by concerns of an acceleration of economic deterioration in the leading nations of the trade war that generate a global contraction.
At the end of the day, the precious metal traded at 1300 dollars per troy ounce, a rebound of 13 dollars that improved its price by 1.08%.
In parallel, the forex market presented for the first time in eight months a red panorama in almost all its main currencies, with the exception of the Canadian dollar that saw strengthen against its American pair by + 0.54%.
The pair EURUSD due to the incursions of the fall in the main stock exchanges of the world, retreated -0.12%, to quote in 1.12245.
Finally, the crypto market saw a resurgence with record highs in almost a year, trading at over $ 7,800 a unit, a double-digit growth of almost 12%. The rest of the market also benefited from bull run, increasing the market capitalization of the market by more than 230 billion dollars.