Dow Crushed After New Trump Tariffs Threaten US Credibility Worldwide

  • Dow Jones falls as US-China tensions escalate.
  • US ISM Manufacturing data weighed on the stock market with another decline.
  • Donald Trump has announced fresh tariffs on Brazilian and Argentinian steel imports despite an existing agreement to the contrary.

The Dow endured a 200 point hammering to start the week. Diplomatic relations between the US and China soured, and ISM manufacturing slumped further into recession. A big loss in the Dow Jones’ most heavily weighted stock also pressured the stock market.

The medium-term outlook for the Dow looks to be worsening as Trump’s move to break trade agreements with Argentina and Brazil could limit China’s appetite to negotiate a trade deal.

Dow Jones Succumbs to Trade Woes & Weak Data

Less than an hour before the closing bell, the Dow Jones Industrial Average had declined by 219.34 points or 0.78% to 27,832.07.

Among the three major US stock market indexes, the Nasdaq was the worst-performing, posting a 1% loss, while the S&P 500 lost around 0.7%.

Dow Jones, Stock Market, China, Trade War, Donald Trump, China, Boeing
The Dow Jones dipped as economic data and trade tensions hit the Dow 30. | Source-Yahoo Finance

Despite the weakness in stocks, the price of gold was 0.3% lower, while crude oil was able to rally over 1.5%.

Skepticism around the ECB’s willingness to ease monetary policy further sparked a decent rally in the euro. This sent European stock markets sharply lower. Some of this weakness spilled into the Dow at the open of trade.

US ISM manufacturing PMI fell yet again, suggesting that a firm stock market and talk of “progress” in trade negotiations are doing little to prop up this flagging sector. Given the importance of the data in assessing the trade war, it should be noted that China’s Caixin manufacturing PMI beat expectations on Sunday (as did the eurozone’s today).

China Pressures Dow with Retaliatory Measures

It was unsurprising to see the Dow Jones under pressure on Monday as US-China relations dominated headlines.

At the heart of the Dow’s troubles was the fallout from…

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