Investor fears swelled Tuesday that President Trump will swiftly impose sweeping tariffs on Chinese imports. The Nasdaq composite fell 1% during the regular session while the S&P 500 lost 0.6% and the Dow Jones industrial average 0.7%. Futures for the S&P 500 and Dow Jones were fractionally higher vs. fair value, while Nasdaq 100 futures slid 0.2%.
Trump is looking to slap tariffs on $60 billion worth of Chinese imports, focusing on tech and telecom products, Reuters reported late Tuesday. That followed a Politico report during the market session that Trump had rejected a $30 billion China tariff figure as too low. Trump plans to target tech and telecom products to punish China for forcing U.S. companies to give up intellectual property rights to operate in the country.
A big concern over Trump’s push to impose sweeping steel and aluminum tariffs was that it was the opening salvo that would trigger retaliation between by trading partners.
The Nasdaq composite, S&P 500 index and Dow industrials extended losses following the Politico report, with several China-exposed stocks suffering notable losses.
Boeing fell 1.6% to 338.67 in Tuesday’s stock market trading, dropping below its 50-day moving average for the first time since May 2017. Boeing fell a fraction after the close. The Dow Jones component expects China to buy thousands of planes in the coming decade. China’s state-owned airlines could easily favor Airbus (EADSY) in the event of a trade war. Boeing also is somewhat exposed to the Trump tariffs on steel aluminum.
Apple lost 1% to 179.97, undercutting a 180.71 buy point. Apple makes most of its iPhones and other gadgets in China via Foxconn and other contractors. China also is a huge consumer market for Apple, though the iPhone has had some struggles amid fierce local competition. Apple, a Dow stock, fell a fraction in late trade.
Intel, another Dow Jones stock, closed up 0.5% to 51.78. But the stock initially shot up to 53.78 intraday on relief that the world’s largest chipmaker was less likely to make a defensive offer for Broadcom (AVGO) after Trump blocked Broadcom’s ambition to buy Qualcomm (QCOM) on national security grounds. Intel sank 1% in late trading.
Micron Technology has been on a huge run, and edged up 0.3% to 158.22 on Tuesday, paring intraday gains. Shares of the memory-chip giant fell 1.2% in late trade.
Nvidia reversed from solid intraday gains to close down 0.8% at 247.71. Shares fell 0.4% late.
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