Posted in: ArchiveMarket News
Published:
May 9, 2019 4:02 PM UTC

Dow Frantically Searches for Silver Lining After China Shocks White House

By CCN: The Dow and broader U.S. stock market frantically searched for a silver lining on Friday after China threatened harsh retaliation in response to a sizable tariff increase by the White House that took effect just hours ago. Dow, S&P 500 Extend Brutal Slide…

By CCN: The Dow and broader U.S. stock market frantically searched for a silver lining on Friday after China threatened harsh retaliation in response to a sizable tariff increase by the White House that took effect just hours ago.

Dow, S&P 500 Extend Brutal Slide

All of Wall Street’s major indexes declined sharply through the Friday morning session. The Dow Jones Industrial Average fell 143.47 points or 0.56% to 25,684.89 as Wall Street grappled with a suddenly-reignited trade war. The S&P 500 slid 0.59% to 2,853.91, while the Nasdaq underperformed with a 0.69% plunge to 7,855.63.

The Dow careened toward another vicious loss on Friday. | Source: Yahoo Finance

Friday’s stock market sell-off followed a similar plunge on May 9, which saw the Dow Jones Industrial Average fell by as much as 450 points before paring losses. It closed down 138.97 points, or 0.5%, at 25,828.36.

The broad S&P 500 Index of large-cap stocks declined 0.3% to settle at 2,870.72. Most major sectors reported declines, with materials companies shouldering the heaviest losses.

Meanwhile, the technology-focused Nasdaq Composite Index declined 0.4% to 7,910.59.

The CBOE Volatility Index, commonly known as the VIX, flashed a dire warning sign on the bull market Thursday. The so-called “fear index” surged more than 20% and peaked at 23.38, its highest since early January. It would later give back all of its gains to settle in the low-19 region.

A VIX reading in the 20-25 range is consistent with the historical average. Anything above that paints an overwhelmingly bearish picture for stocks.

China Retaliates Against Trump Tariff Threat

U.S.-China trade negotiations sour at the worst possible time, placing intense pressure on the Dow. | Source: AP Photo / Andy Wong

China has taken a hard line in its ongoing trade negotiations with the United States after President Trump threatened to impose higher import duties on Chinese goods.

According to The Wall Street Journal, China’s hardened stance surprised White House officials at a critical juncture in negotiations.

Trump’s Sunday Twitter tirade, where he threatened to impose import duties of 25% on $325 billion of Chinese goods, came after one of his top trade advisers complained that Beijing had reneged on a trade deal. China says its tone changed because the U.S. appeared ready to make important concessions.

On Thursday, a Chinese Commerce Ministry spokesperson issued the following statement, which was conveyed via the official Xinhua News Agency:

“The escalation of trade friction is not in the interest of the people of the two countries and the people of the world … The Chinese side deeply regrets the action. If the U.S. tariff measures are implemented, China will have to take necessary countermeasures.”

Click here for a real-time Dow Jones Industrial Average chart.

Now Watch: CCN TV

Last modified: January 10, 2020 3:28 PM UTC

Sam Bourgi @hsbourgi

Financial Editor of CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE, Yahoo Finance and Forbes. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com

Show comments