On Monday, U.S. markets took a huge hit following China’s announcement to implement a tariff on $60 billion of U.S. products, furthering concerns about a U.S.-China trade war and its impacts on the global economy, The Washington Post reports.
The Dow Jones industrial average dropped more than 2 percent, or more than 590 points, during morning trading over concerns about America’s economic relationship with China and the prospect of a new global recession. In particular, Apple, Caterpillar, and Boeing took the biggest hits.
The S&P 500 index dropped 2.25 percent, and NASDAQ similarly was down by nearly 3 percent. Stocks were experiencing their largest slumps since the new start of 2019 on Monday.
“Today’s tit-for-tat in U.S./China trade tariffs has exacerbated tumbling futures out of fear that tensions could trigger a global recession,” said CFRA Research chief investment strategist Sam Stovall.
Last week, President Donald Trump implemented a 25 percent tariff on Chinese imports to the U.S. worth $200 billion. He hinted that he intends to impose tariffs on another $300 billion worth of other Chinese goods.
“Stock investors are in risk-off mode this morning as Trump’s trade war with China seems to be escalating while negotiations seem to be breaking down,” said Yardeni Research president Ed Yardeni.
Attacks on two Saudi oil tankers near the Persian Gulf further added stress to the U.S. stock market as the Saudi Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih called the attacks an “act of sabotage” by a currently undisclosed entity on Sunday.
“Adding to the geopolitical tumult is mounting tension in the Middle East following the sabotaging of Saudi oil tankers over the weekend,” Yardeni said.