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1:59 p.m. There's no relief for the markets today, and a new set of tariffs is to blame.
The Dow Jones Industrial Average has slumped 207.16 points, or 0.8% to 224,712.50, with Boeing (BA), Caterpillar (CAT), Chevron (CVX) and 3M (MMM) accounting for more than half the drop. Boeing and Caterpillar, in particular, are considered to be heavily exposed to the trade war with China. S&P 500 have fallen 0.6%, while Nasdaq Composite has dropped 0.4%.
Ryan Detrick, a senior market strategist at LPL Financial, believes that the sell-off has been relatively modest compared to the headlines. "Considering there is plenty of time to implement these tariffs, the markets are expecting some agreement between the US and China," he says
However, the picture doesn't look so optimistic for emerging markets currencies. The Turkish lira fell 2.4% amidst concerns of central bank's independence, while South Africa's rand declined 1.1% due to drop in metal prices. The yuan, which has been one of the worst performing currencies in the past one month continued to slide--its dowm 0.7%. The South Korean won has declined 0.4%
Dow Drops 218 Points as Trade War Escalates
7:45 a.m. The market's ability to focus on earnings and look past tariffs appears to be short-lived.
Asian markets slumped on Wednesday after the Trump administration released a list of additional tariffs on $200 billion in Chinese goods.
The Shanghai Composite Index tumbled 1.8% % to 2777.77. Hong Kong's Hang Seng dropped 1.3% to 28,311, while Japan's Nikkei 225 shed 1.8% to 21,932.21. Seoul's Kospi fell 0.6% to 2,280.62. The MSCI Emerging Markets Index retreated for a fifth day, dropping almost 1% to 1065.82.
And it's not just Asia that's getting hit. S&P 500 futures have fallen 0.7%, while Dow Jones Industrial Average futures have slumped 218 points, or 0.9%. Nasdaq Composite futures have dropped 0.8%.
"It is a risk-off morning with futures decidedly in the red, the dollar higher and most international shares down 1% or more as trade tensions escalated again overnight," writes The Sevens Report's Tom Essaye.
That's putting it mildly.
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