New Delhi : Wall Street opened lower on Friday, as China revealed retaliatory tariffs against about $75 billion worth of US goods that intensified trade tensions ahead of a much-anticipated speech by Federal Reserve Chair Jerome Powell.The Dow Jones Industrial Average which opened 118.03 points, or 0.45 points lower at the open at 26,134.21, tumbled over 400 points at 11.30 ET.The S&P 500 opened lower by 11.88 points, or 0.41%, at 2,911.07. The Nasdaq Composite dropped 47.74 points, or 0.60%, to 7,943.65 at the opening bell.
China’s latest tariffs, which follow U.S. duties on $300 billion worth of Chinese goods, threaten to prolong an ongoing trade war between the world’s top two economies that has raised concerns about slowing global growth.China’s commerce ministry said it would impose additional tariffs on thousands of U.S. products, including agricultural products, crude oil, small aircraft and cars. Tariffs on some products would take effect on Sept. 1 and others on Dec. 15.U.S. Treasury bond yields slid following the development, while interest sensitive banks fell 0.55%. Tariff-sensitive technology stocks dropped 0.54%, pressured by a fall in chipmakers and Apple Inc. The Philadelphia chip index slid 1.62%.
“Of course China is going to retaliate. That is part of the trade war,” said Scott Brown, chief economist at Raymond James, in St. Petersburg, Florida.”Trade issues are going to be important heading into the Powell speech and he has to give some indication on how the global environment is influencing the Fed.”Powell speaks at 10 a.m. ET (1400 GMT) in Jackson Hole and investors will be looking for confirmation that the central bank will cut interest rate next month to sustain a decade long bull run for Wall Street.
At 9:41 a.m. ET, the Dow Jones Industrial Average was down 103.97 points, or 0.40%, at 26,148.27, the S&P 500 was down 12.45 points, or 0.43%, at 2,910.50. The Nasdaq Composite was down 45.05 points, or 0.56%, at 7,946.34.Energy sector dropped 1.20%, the most among the S&P sectors, as oil prices fell.Defensive plays were in favor as utilities was the only major S&P higher, while and real estate and consumer staples posted the smallest losses.HP Inc slipped 6.8% after Chief Executive Officer Dion Weisler stepped down and the PC maker forecast fourth-quarter profit below analysts’ estimates.
The biggest gainer on the S&P was Salesforce.com Inc up 5.6%, after the cloud-based service provider forecast third-quarter and full-year revenue above Wall Street estimates.Declining issues outnumbered advancers for a 2.68-to-1 ratio on the NYSE and for a 2.39-to-1 ratio on the Nasdaq.The S&P index recorded 21 new 52-week highs and 13 new lows, while the Nasdaq recorded 11 new highs and 41 new lows.
