Update, 4 p.m.: Stocks ended the day down more than 760 points in the worst trading day of 2019.
Stocks were down sharply during Monday morning trading after China’s currency tumbled to a record low on President Donald Trump’s recent trade war moves.
The Dow Jones Industrial Average dropped 2.3%, or 600 points, at 10:45 a.m. ET, while the S&P 500 took a 2.1% hit and was down 62 points. The Nasdaq Composite fell nearly 3%, or 237 points.
Footwear stocks were also in the red, with Nike down more than 2% to $79.39, Shoe Carnival shedding 4.6% to $21.89 and Steve Madden dipping 4% to $29.42.
The slide came as the Chinese government devalued the yuan to below its 7-to-1 ratio with the United States dollar for the first time in a decade. Investors have expressed worries that the U.S. could respond by knocking down its own dollar, which could trigger a currency war and weaken the spending power of American shoppers.
China’s central bank said that the decline was a consequence of trade protectionism, while Trump accused the country of engaging in currency manipulation.
“This is a major violation which will greatly weaken China over time,” he wrote on Twitter. (The president also took aim at the Federal Reserve, which recently cut its key interest rate in the hopes of getting ahead of a potential slowdown in the U.S. economy.)
Wall Street is also anxious over Washington’s threat of higher tariffs on Beijing, following Trump’s sudden announcement on Friday of a 10% tariff on an additional $300 billion worth of Chinese goods. The moment marked the end of a temporary truce between the world’s two largest economies in their yearlong trade war.
News of the duty hike shocked the footwear industry, with executives from trade groups and major companies bemoaning the impact of the levies on manufacturers, retailers and ultimately consumers. The fourth tranche of tariffs is set to hit footwear, apparel and other accessories on Sept. 1.
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