Home International China’s Retaliatory Tariffs Cause US Stock Prices to Fall

China’s Retaliatory Tariffs Cause US Stock Prices to Fall




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China’s announcement of new tariffs on more than one hundred goods from the US caused to take a tumble on Monday, April 2. Losers include large companies, which have long been the favorite of investors.

The retaliatory tariffs from China are considered to be a step toward a full scale trade between the two largest global economies.

Investors have been taking money out of the market due to concerns about technology companies, primarily Facebook’s massive data breach, as well as US trade policies that are becoming ever more protectionist. Stocks of Alphabet, the parent company of , Netflix and Microsoft have taken a dive. Alphabet lost 2.4 percent, and Microsoft, 3 percent.

Intel’s stock has fallen by more than 6 percent, after Bloomberg published an article reporting that will manufacture their own chips for Mac laptops and desktops, and online giant Amazon has also suffered a loss greater than 5 percent, since President Trump has been targeting on Twitter.  The President has been critical of Amazon because of shipping deals with the national postal service, as well as certain issues.

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Amazon has followed in the footsteps of Facebook and Alphabet, which have seen losses after government investigations on data . Industry expert Jack Ablin said, “ seems like the long arm of the government is interfering with investors’ expectations. Investors are pricing in an escalating and regulation of tech companies.”

The Dow Jones average slid by 758 points, but major indexes rallied toward the end of the afternoon. The Dow fell by 1.9 percent to 23,644.19. The S&P index fell even further, losing 2.2 percent, to 2,581.88. The Nasdaq fell by 2.7 percent, to 6,870.12. Smaller-company stocks on the Russel 2000 index lost 2.4 percent, to 1,492.53.

Investment strategist for Edward Jones, Kate Warne, focused on how significant China’s move was. “The fact that a country has actually raised tariffs in retaliation is an important step in the wrong direction. The tariffs imposed by China today lead to greater worries that we will see escalating tariffs and the possibility of a much bigger impact than investors were anticipating last week. And that could be true for as well as for China.”

Trade negotiations between the US and other countries have been ongoing for the past month. However, China is the first country to impose retaliatory tariffs for US trade sanctions.

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As investors withdrew money from stocks and placed it in safer investments, the price of gold and silver rose. Gold is now at $1,343.60 per ounce, climbing 1.2 percent, and silver is now at $16.60 an ounce, up by 2 percent. The price of copper rose by 2 cents and is now at $3.05 per pound.

prices suffered a drop. US crude slid by 3 percent to $63.01 per barrel in New York. Internationally, the price of oil dropped 2.5 percent to $67.64 per barrel in London. The prices of wholesale gasoline, heating oil and natural also fell.

The dollar fell from 106.50 yen to 105.85 yen, while the euro rose from $1.2306 to $1.23.

Due to the Easter , trading in Germany, and the was closed. ’s Hang Send was also closed. Korea’s Kospi fell by nearly 0.1 percent and Japan’s Nikkei 225 ended at a 0.3 loss.

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