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Overnight Markets: Dow skids 420 points on Trump tariff talks

Auto makers fell after the US president said Washington would impose tariffs of 25% on steel imports and 10% on imported aluminum.

 
Overnight Markets: Dow skids 420 points on Trump tariff talks

US stocks plunged on Thursday, marking a third straight decline, after President Donald Trump said the US would impose import tariffs on steel and aluminum, raising concern about higher prices and a trade war.

The Dow Jones Industrial Average fell 420 points, or 1.68%, to 24,609, the S&P 500 lost 36 points, or 1.33%, to 2,678 and the Nasdaq Composite dropped 92 points, or 1.27%, to 7,181.

Shares of auto makers and other big consumers of steel and aluminum added to their session losses after Trump said the US would impose tariffs of 25% on steel imports and 10% on imported aluminum next week, while shares of US steel and aluminum companies jumped.

Earlier in the session, stronger-than-expected economic releases lent support to markets, with the Institute for Supply Management’s manufacturing index hitting a 13-year high, helping push the equity benchmarks higher.

The declines exacerbated this week in the wake of Congressional testimony from Federal Reserve chair Jay Powell, whose upbeat assessment of the US economy prompted an investor rethink about a potentially faster pace of interest rate rises this year.

Yesterday, General Motors Co (GM.N) lost 4%, while Ford Motor Co was down 3.0%. U.S. Steel shares rose 5.7%, while shares of Nucor climbed 3.3%.

Industrial heavyweights like Boeing (BA.N) and Caterpillar (CAT.N) also fell as investors worried about higher raw material costs and trade barriers elsewhere. Boeing was down 3.5% and Caterpillar was down 2.8%.

Shares in L Brands Inc. tumbled nearly 14% after the Victoria’s Secret parent late Wednesday gave a quarterly outlook that appeared to disappoint Wall Street.

Salesforce.com Inc.’s stock rose 2.7% after the software company’s quarterly results beat expectations.

Best Buy Co. earnings and revenue came in above expectations, sending shares 4% higher.

In Asia, shares declined on Friday in morning session, with steel producers and automaker names recording steep drops following the tariff announcement from Trump.

In Tokyo, the benchmark Nikkei 225 fell 607 points, or 2.8%. Elsewhere, the Kospi declined 1.53%. Down Under, the S&P/ASX 200 edged lost 0.92%.

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1 comment so far. Why not have your say?

SDRL

Mar 04, 2018 at 18:46

This is a buying opportunity. President Trump is doing what is right for the US and May should do the same for furthering the interests of the UK.

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