Dow falls 2% on worries over US-China trade talks

New York, May 7: Losses on Wall Street deepened Tuesday afternoon as the latest trade dust-up between Beijing and Washington raised fears about the prospects for agreement after months of conflict.

Near 1740 GMT, the Dow Jones Industrial Average was at 25,901.59, down more than 530 points, or 2.0 percent.

The broad-based S&P 500 also fell 2.0 percent to 2,874.46, while the tech-rich Nasdaq Composite Index slid 2.3 percent to 7,935.33.

Hopes the United States and China can seal a trade deal took a hit over the weekend when President Donald Trump threatened to raise tariffs on Chinese imports as of Friday.

Beijing has decided to proceed with key trade talks later this week but the White House now says US duties on $200 billion in Chinese merchandise will more than double on Friday.

Investors have generally viewed the Trump threats as a bargaining tactic, yet Tuesday's pullback suggested some fear the latest back-and-forth could pose a more serious obstacle.

“The new tariffs have caught the market off guard,” said Quincy Krosby, chief market strategist of Prudential Financial. “The question becomes, What will the Chinese do?”

Industrials were a hard-hit sector, with Caterpillar shedding 2.9 percent, United Technologies 3.0 percent and 3M 2.2 percent.

Technology companies also fell, with Apple losing 2.9 percent and Microsoft and Facebook both 2.5 percent.

(AFP/APP)

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