FYI: U.S. stocks slumped Friday after China said it would impose retaliatory tariffs on additional U.S. products and President Trump vowed to respond.
The Dow Jones Industrial Average dropped more than 623 points, or 2.37%, putting a halt to a relatively quiet week for markets. Yields on U.S. government bonds also tumbled, as did commodities markets, such as oil and copper, that are sensitive to the two countries’ trade battle.
The losses accelerated after President Trump fired off a series of Tweets in response to China’s plan to impose tariffs on $75 billion more in U.S. goods.
“We don’t need China and, frankly, would be far better off without them,” he said on Twitter, while ordering U.S. companies to start looking for alternatives to producing in China.
The developments Friday marked an escalation of trade tensions between two of the biggest global economies, stoking waves of selling in the stock market. The S&P 500 dropped 2.59%, on track to give up its gains for the week, while the Nasdaq Composite declined 3.00%.
The developments overshadowed a highly anticipated speech from Federal Reserve Chairman Jerome Powell in Jackson Hole, Wyo., about the future of interest-rate policy.
Ahead of the speech, many investors suggested his comments had the potential to spark big moves across bond, currency and stock markets. Instead, the reaction was muted. Stocks briefly rose after the speech and took a dive following Mr. Trump’s comments on Twitter.
Shares of technology companies were some of the biggest hit in the S&P 500, falling 3.1% and under-performing the broader gauge. Retail stocks also took a hit, with L Brands and Hasbro each diving more than 8%.
Auto makers such as General Motors and Ford Motor fell about 3.1% and 2.5%, respectively. Caterpillar, which has also been sensitive to trade news, fell about 3.1%. Apple dropped 4.5%.
The yield on the 10-year Treasury note fell to 1.511% in recent trading, according to Tradeweb, compared with 1.613% Thursday.
Meanwhile, the WSJ Dollar Index fell 0.4% to 90.94. Lower Treasury yields can make the U.S. dollar less attractive to income seeking investors around the world.
U.S. crude oil dropped about 3.4% to $53.48 a barrel.
Friday’s moves in stocks came a day after a series of weak manufacturing data around the world raised concerns about a possible recession, weighing on U.S. indexes.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-08-22/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/stocks-set-to-head-slightly-higher-as-wall-street-awaits-powells-jackson-hole-speech-2019-08-23/printWSJ:
https://www.wsj.com/articles/global-stocks-rise-with-all-eyes-on-the-fed-11566547507Bloomberg:
https://www.bloomberg.com/news/articles/2019-08-22/asia-stocks-set-for-muted-start-as-powell-awaits-markets-wrap?srnd=premiumIBD:
https://www.investors.com/market-trend/stock-market-today/china-trade-war-fears-rout-stocks-nasdaq-falls-3-percent/CNBC:
https://www.cnbc.com/2019/08/23/us-stocks-wall-street-monitors-speech-from-fed-chair-jerome-powell.htmlReuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-plunges-as-u-s-china-trade-war-intensifies-idUKKCN1VD15JU.K:
https://uk.reuters.com/article/uk-britain-stocks/trump-tweet-topples-ftse-100-idUKKCN1VD0O9Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-slide-as-u-s-china-trade-war-intensifies-idUSKCN1VD0O1Asia:
https://www.cnbc.com/2019/08/23/asia-markets-aug-23-fed-dollar-and-japan-south-korea-tensions.htmlBonds:
https://www.cnbc.com/2019/08/23/us-bonds-treasury-yields-rise-as-investors-await-clues-from-powell-speech.htmlCurrencies:
https://www.cnbc.com/2019/08/23/forex-markets-federal-reserve-new-zealand-dollar-in-focus.htmlOil:
https://www.cnbc.com/2019/08/23/oil-markets-federal-reserve-jerome-powell-speech-in-focus.htmlGold:
https://www.cnbc.com/2019/08/23/gold-markets-federal-reserve-jerome-powell-speech-in-focus.htmlWSJ: Markets At A Glance:
https://markets.wsj.com/usMajor ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitorSPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerSPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectorsCurrent Futures:
https://finviz.com/futures.ashx 
