Stocks slump after Trump says no deadline for China trade deal
Stocks sank on Tuesday after President Donald Trump suggested a long-awaited trade deal with China could be delayed until after the 2020 election and said he doesn't have a deadline for clinching an agreement. The Dow dropped more than 400 points, while the broader S&P 500-stock index and tech-heavy Nasdaq composite also lost ground.
Before the markets opened on Tuesday, Mr. Trump told reporters overseas the U.S. trade battle with China could last well into 2020. "I think in some ways it's better to wait until after the election for the China deal," he said. "But they want to make a deal now. It's got to be right."
The comments come as Mr. Trump picks other fights on trade during a NATO summit in London, with France vowing to retaliate after the Trump administration threatened U.S. tariffs on French goods from Champagne to handbags on Monday. "The transatlantic trade war is about the enter an ugly phase," according to OANDA senior market analyst Edward Moya.
Mr. Trump on Monday also said he would restore tariffs on steel and aluminum imported from Brazil and Argentina, where farmers are selling billions worth of soybeans and pork to China. Much of that business had come from U.S. farms until China dropped Americans as suppliers last year after Mr. Trump imposed industrial tariffs on the world's second-largest economy.
The Dow fell 440 points, or about 1.6%, to 27,340 in early trading. The S&P lost 1.2%, while the Nasdaq shed 1.3%.
Technology stocks led the losses. The sector is highly sensitive to twists in the trade dispute because many of the companies rely on China for sales and supply chains. Apple slumped 2.5% and Intel fell 2.4%.
Bank stocks also suffered heavy losses as investors headed for the safety of bonds and pushed yields lower. Banks rely on higher bond yields to charge more lucrative interest rates on mortgages and other loans. The yield on the 10-year Treasury fell sharply, to 1.74% from 1.83% late Monday.
Bank of America dropped 2.3% and Citigroup fell 2.2%.
—The Associated Press contributed to this report.