Wall Street shares finished lower on Monday, weighed down by news that China cancelled trade talks with the US.
The market's mood was undermined by Beijing’s move to back out of planned talks to resolve trade differences with the US, which came as Washington slapped a 10% duty on $200 billion worth of Chinese goods.
That tariff is set to jump to a 25% levy by year’s end and China has hit back by slapping tariffs on over 5,000 US goods worth $60 billion.
The Dow Jones Industrial Average Index sank 181 points or by nearly 0.7% to close at 26,562.
The S&P 500 shed 0.35% to settle at 2,919.
The tech-laden Nasdaq was the only exchange to rise on the day, eking out a 0.08% gain to 7,993.
The Russell 2000 index of small-cap stocks was down, slipping 0.46% to conclude at 1,704.
In Canada, Toronto’s TSX shed 0.1% to 16,202.
10 AM: US stocks open lower as pressure intensifies after China cancels trade talks with US
US stocks slipped on Monday to open lower as trade tensions accelerated after China cancelled trade talks with the US.
Indeed, market sentiment was unsettled by Beijing’s move to back out of planned talks to resolves its trade differences with the US, which came as the US introduced a 10% duty on $200 billion worth of Chinese goods.
The US’s 10% tariff is set to jump to a 25% levy by the year’s end and China has hit back by slapping tariffs on over 5,000 US goods, which are worth $60 billion.
Early in the session, the Dow Jones Industrial Average Index shed 74 points to 26,669, held back by Microsoft, Visa, Walgreens Boots Alliance, McDonald’s, Home Depot and International Business Machines Corp.
The S&P 500, meanwhile, fell back by 11 points to 2,918, dragged back by Michael Kors Holdings, IPG Photonics Corp, Aptiv, PPG Industries Inc and General Electric.
One bright spot were energy stocks, which popped after the oil price soared above $80 per barrel after the world’s oil producers said they wouldn’t increase output despite pressure from President Donald Trump to take steps to reduce prices.
Elsewhere, the tech-laden Nasdaq slumped by 56 points to 7,931, pushed down by a 7.9% fall in Comcast shares (NASDAQ:CMCSA) which took a hit after the US cable-TV behemoth offered $40bn to win the auction for the British broadcaster Sky (LON:SKY). The slumping prices of JD.com, Sirius XM Holdings, Wynn Resorts and Liberty Global also weighed on the Nasdaq.
The Russell 2000 index of small-cap stocks was also down, shedding nearly 8 points to 1,712.
Up in Canada, Toronto’s TSX bucked the trend to add nearly 25 points to 16,249, as energy stocks rose on the back of higher oil prices.
7:11 AM: Wall Street set for lower start as trade war intensifies; European benchmarks in the red
Wall Street shares are poised to join European indices and start the week lower as the record-breaking ways of last week fizzles out and the trade war between the USA and China ratcheted up a notch.
President Donald Trump has now started the 1% tariffs on US$200bn of Chinese goods just after midnight Eastern time.
In corporate news, the huge Comcast (NYSE:CMCSA) bid for Sky (LON:SKY) is a big topic, as is the massive gold miner deal with Barrick and Randgold.
US stocks on Friday had a mixed close. The Dow Jones Industrial Average added 86 points to 26,743. The Nasdaq shed around 41 at 7,986. The S&P 500 lost around one point at 2,929.
In Toronto, the TSX composite, the largest market there, closed up around nine points at 16,224.
In futures today, the Dow Jones is down 33; the S&P 500 lost ten points and the Nasdaq shed around 24.
In London, FTSE 100 closed down nearly nine at 7,481; the German DAX shed 29, while the CAC 40 lost around eight points.
In Asia overnight, the Nikkei 225 added 195 points; the Shanghai Composite Index added around 68 at 2,797.
Connor Campbell, at Spreadex, said: "Despite the OPEC-Trump spat – the US President has his grubby finger in a lot of different geopolitical pies – sending Brent Crude up 2.4% to hit an $80.50 per barrel-plus 4 year high, the FTSE couldn’t help but drift 15 or so points lower as the day went on.
"Contributing to that decline were the index’s mining stocks which, unlike BP and Shell, were not in a good mood, with the trade tensions keeping the sector’s big players in the red."