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Dow Winces as Trade War Overwhelms Crucial Stocks

Last Updated September 23, 2020 12:50 PM
Josiah Wilmoth
Last Updated September 23, 2020 12:50 PM

The Dow teetered toward a loss on Wednesday after President Trump exposed a lack of confidence in the state of trade negotiations with China. Trump’s unexpected remarks overwhelmed DJIA components with substantial ties to the world’s second-largest economy.

Dow Slumps, Market Fails to Regain All-Time Highs

The US stock market failed to regain its all-time highs midway through the morning session, with all three major indices trading lower.

The Dow Jones Industrial Average dropped 84.95 points or 0.31%; the DJIA last traded at 27,250.68, placing it on track for its second straight decline.

dow jones
The Dow traded down heading into midday trading. | Source: Yahoo Finance

The S&P 500 declined 11.92 points or 0.39%, settling at 2,992.33.

The Nasdaq fell to 8,199.56 for a loss of 23.24 points or 0.28%.

DJIA Stocks Struggle as Trade Tensions Mount

President Trump’s shocking revelation that the United States and China are nowhere near signing a formal trade deal sapped the energy out of the market on Tuesday, and the frosty mood continued to roil multiple Dow members on Wednesday.

Caterpillar stock fell 2% to $136.38, making it the second-worst performer in the index. Only Walgreens Boots Alliance outpaced its retreat. Sales to China make up as much as a tenth of CAT’s revenue, and it also faces pressure from an economic slowdown in the region.

caterpillar stock price chart
Caterpillar stock 2% on the day. | Source: Yahoo Finance

Chemical producer Dow Inc. slid 0.78% to $51.90, and 3M declined 0.61% to $175.41. Both companies have found themselves mired in the US-China dispute.

On the other side of the ledger, Boeing – the troubled aerospace giant that Beijing has frequently used to place leverage on the White House throughout the trade war – resisted the trend. BA shares climbed 1.08% to $366.68.

It’s not clear where trade negotiations go from here. President Trump’s suggestion that enhanced tariffs are back in play seems to contradict US Treasury Secretary Steven Mnuchin’s claim that the two sides are 90% of the way to a deal, and escalating rhetoric on both sides risks derailing the next round of talks before they even begin.

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