The Dow erases its 2018 gains as Trump moves closer to an all-out trade war with China
Global markets shuddered on Tuesday after President Donald Trump threatened tariffs on billions of dollars' worth of goods from China, putting the world's largest economies on the brink of a trade war.
Here is the scoreboard:
Dow Jones industrial average: 24,699.04, -288.43 (-1.15%)
S&P 500: 2,760.29, -13.46 (-0.49%)
- Trade tensions between the US and China are soaring. After the Trump administration said it was ready to hit Beijing with tariffs on $200 billion worth of goods, China's Commerce Ministry warned it would retaliate. Trump said that could result in another round of US tariffs, altogether threatening $450 billion worth of Chinese goods.
- Russia is also pushing back on US tariffs. Russia's economic minister, Maxim Oreshkin, said Moscow would roll out import duties on US road-building machinery in response to the Trump administration's tariffs on imports of steel and aluminum.
- Oil prices slid ahead of an OPEC meeting in Vienna on Friday. Oil ministers, led by Saudi Arabia and Russia, are expected to ease supply cuts amid output disruptions from several member countries, including Venezuela and Iran. Trade spats also weighed on US crude, which could be included in future Chinese import tariffs.
- In a reversal, the European Central Bank said it could continue its large-scale stimulus program next year. The central bank's president, Mario Draghi, said at a conference in Portugal that it may postpone an end to its bond-buying program, a move announced by the central bank just last week.
- US housing starts rose last month to a peak not seen since July 2007. New construction increased 5%, to a seasonally adjusted annual rate of 1.35 million units, the Commerce Department said. But building permits fell 4.6% in May, signaling more modest activity.
And a look at the upcoming economic calendar:
- Quarterly trade data, monthly existing home sales, and weekly oil numbers are due out in the US.
- Central bank leaders from the US, Australia, and Japan speak at an ECB forum in Portugal.
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