US stocks tumble as Trump announces new tariffs on China

Aug 01, 2019: The Dow plunged into negative territory on Thursday after President Donald Trump announced new tariffs on Chinese imports, battering retailers and other sectors.

US stocks had been comfortably higher a day after the Federal Reserve cut interest rates for the first time in a decade.

But near 1800 GMT, the Dow Jones Industrial Average was down 0.6 percent at 26,698.80, quickly losing more than 400 points after Trump's tweet announcing the tariffs.

The broad-based S&P 500 lost 0.6 percent at 2.962.89 while the tech-rich Nasdaq Composite Index shed 0.3 percent to 8,147,53.

The announcement also weighed on oil prices and the dollar.

Trump said the latest tariffs on Chinese goods would take effect September 1 and add a 10 percent duty to $300 billion in Chinese goods that had not been previously affected.

The announcement follows earlier Trump tariffs on Chinese goods but will now affect many household items, sneakers, toys and other consumer goods.

Retailers were broadly lower, with Target down 4.0 percent, Best Buy 8.5 percent and Macy's 6.0 percent. Nike shed 2.7 percent and toymaker Hasbro 4.1 percent.

Trump's announcement also exacerbated losses on the oil market, with US benchmark West Texas Intermediate falling nearly seven percent at $54.54 per barrel.

The dollar retreated against the euro following the tariff announcements, reversing its upward lurch since the Fed cut interest rates by an amount that was smaller than some traders had expected.

AFP/APP