Stock dive as trade tensions heat up between United States and China

Dianna Christensen
April 11, 2018

The FTSE 100 in Britain lost 0.2 per cent. Shares of Boeing, the single largest USA exporter to China, tumbled 4.6 percent.

The stock market has changed direction again and again this week as investors tried to get a sense of whether a trade dispute between the two nations will escalate.

Fed Chair Powell, meanwhile, signalled that the U.S. central bank still plans to press ahead with additional interest rate hikes in 2018, a stance that also disappointed investors.

Responding on Friday, China's Ministry of Commerce said it would immediately retaliate if the U.S. imposed the sanctions.

"Markets are forced to confront the idea that rates are going up and the stock market is not going to derail that process", McMillan said. "We're not quite sure what the long-term strategy is".

Share prices on Wall Street tumbled on Friday, with the Dow Jones Industrial Average falling more than 500 points.

The Dow ended 572 points lower, closing at 23,932 for a 2.3 percent decline. The Nasdaq composite slid 161.44 points, or 2.3 percent, to 6,915.11. It fell as much as 767 points earlier in the day.

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"The market is getting more concerned about the possibility of a trade war between the U.S. and China", said Tom Cahill, portfolio strategist at Ventura Wealth Management.

US President Trump said he is considering tariffs on an additional 100 billion dollars-worth of Chinese imports, and China has warned that it is ready to retaliate. China earlier said no talks were ongoing.

"We've gone from Larry Kudlow trying to calm the markets down to the administration saying, 'Hey, ignore the markets, '" Hogan said.

Stocks dipped further after Trump criticized the World Trade Organization on Twitter Friday morning and the losses worsened in the afternoon. Only two of the most active USA stocks premarket were higher.

"As long as the trade spat continues, markets are going to be jittery", said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Mnuchin said he was hopeful that negotiations with his Chinese counterparts could avert a damaging escalation of retaliatory, tit-for-tat tariffs but declined to elaborate on the status of talks and whether he thought an agreement could be reached. Caterpillar, Boeing, and Nike, giants with heavy exposure in China, were among the biggest losers in the index.

"I feel like this is a typical reaction, but I think that it will come back around", said Zach Holt.

Other reports by GlobalViralNews

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