Stocks are sinking as trade tensions flare up

NEW YORK — Stocks are opening lower Monday, adding to a global sell-off sparked by heightened trade tensions between the U.S. and China.

The Dow Jones industrial average fell 200 points, or just under 1 percent at the open. The S&P 500 and the Nasdaq are both off by 0.5 percent.

Tariffs imposed by the world’s two biggest economies are set to take effect on July 6, ratcheting up a trade dispute that has been simmering for months. President Donald Trump has announced a 25 percent tariff on up to $50 billion of Chinese products. China is retaliating by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey.

The heightened tensions are creating increased uncertainty for U.S. businesses that operate internationally, and there are fears that rising prices and supply chain disruption will in turn hurt consumer confidence. 

“Individual US sectors ranging from agriculture to aerospace are vulnerable to retaliation by China. Thus the growth and inflation impact on the US economy will depend in large part on China’s response, as well as the impact trade tensions have on global growth,” Madhavi Bokil, senior credit officer at Moody’s, said in a note on Friday.

Losses were across the board. Machine maker Caterpillar shed 1.3 percent, chip maker Intel dropped 3.2 percent and biotech company Biogen dropped 4.6 percent.

Menswear brand Perry Ellis is down 2.1 percent. Its founder, George Feldenkreis, is buying more stock and taking the company private for $437 million.

With investors worried about a trade war, bonds rose. The yield on the 10-year Treasury fell to 2.91 percent.

Indexes in Asia and Europe fell. Germany’s DAX index shed 1.4 percent while Japan’s Nikkei slipped 0.8 percent.

© 2018 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

Categories: Business

Leave a Reply

Your email address will not be published. Required fields are marked *