Following short-lived optimism borne of a purported truce in the trade war, renewed fears from the arrest of a top Chinese executive and concerns over oil prices are yielding a selling wave in the stock market.
The Dow Jones Industrial Average opened in the red, plummeting 400 points before market open and sliding 461 points, or 1.84 percent, as of 10:30 a.m. ET. The drop came just two days after the Dow suffered a 799-point loss in Tuesday’s trading session. (Markets were closed on Wednesday in honor of former United States president George H.W. Bush, whose memorial service was designated a national day of mourning.)
Investors were spooked when news broke of Chinese telecom giant Huawei CFO Meng Wanzhou’s arrest in Canada at the behest of the U.S., exacerbating tensions between two of the world’s largest economies. The sell-off is also happening as crude oil prices tumble ahead of a key OPEC meeting in Vienna, which would determine a supply cut in daily production that would help stabilize the market.
President Donald Trump also stoked worries when he referred to himself as a “Tariff Man” in a tweet on Tuesday. “When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so,” he wrote.
That evening, Trump added: “We are either going to have a REAL DEAL with China, or no deal at all — at which point we will be charging major Tariffs against Chinese product being shipped into the United States.”
The U.S. has already slapped tariffs on $250 billion worth of Chinese imports. Trump had previously threatened to raise levies from 10 percent to 25 percent on an additional $200 billion of goods but agreed to a 90-day financial ceasefire with Chinese President Xi Jinping over the weekend at the G20 summit in Buenos Aires, Argentina.
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