NATIONAL NEWS

Surprise Threat From Trump To Raise Tariffs Sinks Stocks

May 6, 2019, 11:38 AM | Updated: Jun 8, 2022, 5:09 pm
Traders and financial professionals work at the opening bell on the floor of the New York Stock Exchange (NYSE), May 6, 2019 in New York City. The Dow Jones Industrial Average dropped over 360 points at the open on Monday morning after U.S. President Donald Trump said that the U.S. will raise tariffs on goods imported from China. China also threatened to skip upcoming trade talks following tariff threats from President Trump. (Photo by Drew Angerer/Getty Images)
(NYSE)

NEW YORK (AP) — U.S. stocks fell in morning trading Monday, following a sell-off in Europe and Asia, after President Donald Trump threatened to escalate a trade war between the world’s two largest economies.

Investors have been expecting the U.S. and China to resolve their damaging trade dispute, with the two sides set to meet this week in Washington. Hopes for an accord have contributed to the big run-up in stock prices in the U.S. and China so far this year.

The latest threat shifted stocks into reverse Monday after the S&P 500 and Nasdaq indexes set records last week.

The Dow Jones Industrial Average fell 195 points, or 0.7%, as of 11:22 a.m. It was down as much as 471 in the first few minutes of trading.

The S&P 500 index dropped 0.8% and the Nasdaq slid 0.9%.

Trump on Sunday threatened to raise tariffs on imports from China to 25% from 10% after complaining that trade talks were moving too slowly. He also threatened to impose tariffs on another $325 billion in imports from China, covering everything the country ships annually to the United States.

Tariffs currently in place have already raised costs on goods for companies and consumers.

U.S. companies with heavy business interests in China are getting hit the hardest, particularly technology and industrial companies. Banks also fell sharply.

Every sector, from industrial companies to retailers, was under pressure. Chipmakers and technology companies suffered the most.

Qualcom gets 64.7% of its revenue from China, according to data provider FactSet, and its stock fell 2.2%. Broadcom fell 2% and Apple fell 2.1%.

Micron Technology Inc., Advance Micro Devices Inc. and Applied Materials Inc. all fell more than 3%.

Industrial behemoth Caterpillar fell 2.4%, while Deere & Co. fell 3.9%.

Wynn Resorts, with a host of casinos and hotels in Macau, gets about 75% of its revenue from China, according Its stock tumbled 4.8%.

Investors fled to safer holdings. Bond prices rose sharply, sending yields lower, and safe-play stocks like utilities, real estate companies and makers of consumer products held up much better than the rest of the market.

Chinese indexes plunged. The Shanghai Composite index closed 5.6% lower and Hong Kong’s Hang Seng index sank 2.9%. European indexes fell broadly.

Oil prices, which have been steadily rising all year, fell slightly. Benchmark U.S. crude lost 0.2% per barrel.

Shares of Chinese companies that trade in the U.S. also fell. J.D.com slid 5.7% while internet search company Baidu dropped 2.1%.

Investors have been digesting mixed reports about the negotiations for months and have largely discounted concerns about a failure in negotiations. The broader market has been posting gains all year on encouraging economic growth and solid corporate earnings results.

“We see the weekend’s developments as a negative catalyst for the market, not only because of where investor expectations have been regarding the deal, but because of the downward earnings revisions that are likely to occur if the tariffs are expanded,” said Lori Calvasina, head of U.S. equity strategy at RBC Capital, in a note to clients.

Boeing fell 1.3% after it disclosed that it did not warn airlines about a faulty safety alert until after one of its planes crashed.

The sensors malfunctioned during an October flight in Indonesia and another in March in Ethiopia, causing software on the plane to push the nose down. Pilots were unable to regain control of either plane, and both crashed, killing 346 people.

Boeing said Sunday that it discovered after airlines had been flying its 737 Max plane for several months that a safety alert in the cockpit was not working as intended, yet it didn’t disclose that fact to airlines or federal regulators until after one of the planes crashed.

Anadarko Petroleum Corp. rose 3.6% after Occidental revised its buyout offer to include more cash. Occidental is still offering $76 per share, but that now involves $59 per share in cash instead of $38.

KSL 5 TV Live

Top Stories

National News

FILE PHOTO - (Deseret News)...
Associated Press

Inmate serving life for fatal Vegas bombing escapes prison

Authorities are searching for a 42-year-old convicted bombmaker who escaped from a Nevada prison where he was serving a life sentence for a deadly 2007 explosion outside a Las Vegas Strip resort.
1 day ago
FILE PHOTO (Deseret News)...
Associated Press

California murder suspect, teen daughter killed in shootout

California authorities say an abducted 15-year-old girl and her father — a fugitive wanted in the death of the teen’s mother — were killed in a shootout with law enforcement.
1 day ago
NEW YORK, NEW YORK - SEPTEMBER 12: Taylor Hawkins of honorees Foo Fighters performs onstage during ...
Chloe Melas, CNN

Foo Fighters set to honor Taylor Hawkins in second tribute show

The late Foo Fighters' drummer Taylor Hawkins will be honored in an all-star tribute concert in Los Angeles on Tuesday night.
1 day ago
Waves kick up under a dark sky along the shore of Batabano, Cuba, Monday, Sept. 26, 2022. Hurricane...
Nouran Salahieh, Jason Hanna and Christina Maxouris, CNN

Hurricane Ian is growing stronger FL governor warns time to evacuate is ‘rapidly running out’

More than 2.5 million Floridians are under some kind of evacuation warning Tuesday as Hurricane Ian marches closer to the state's west coast.
1 day ago
WASHINGTON, DC - JULY 21: Former President Donald Trump, left, and former White House aide Nick Lun...
Associated Press

Jan. 6 panel delays hearing as Hurricane Ian aims at Florida

The House Jan. 6 committee is postponing a hearing scheduled for Wednesday as a hurricane hurtled toward the Florida coast.
1 day ago
ST. PETERSBURG, FLORIDA - SEPTEMBER 27: People look out as clouds from the approaching Hurricane Ia...
Cary Schwanitz

Utah Red Cross sends volunteers to Florida as Hurricane Ian closes in

The American Red Cross of Utah sent trained disaster volunteers and staff to Florida this week as the area prepares for the wrath of Hurricane Ian.
1 day ago

Sponsored Articles

young woman with stickers on laptop computer...
Les Olson

7 ways print marketing materials can boost your business

Custom print marketing materials are a great way to leave an impression on clients or customers. Read for a few ideas to spread the word about your product or company.
young woman throwing clothes to organize a walk in closet...
Lighting Design

How to organize your walk-in closet | 7 easy tips to streamline your storage today

Read our tips to learn how to organize your walk-in closet for more storage space. These seven easy tips can help you get the most out of your space.
Types of Computer Malware and Examples...
PC Laptops

5 Nasty Types of Computer Malware and Examples | Everything You Need to Know to Keep Your Computer and Family Safe

Here are the different types of computer malware and examples that could potentially infect your computer.
tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
Surprise Threat From Trump To Raise Tariffs Sinks Stocks