Stocks tumble after Trump tells companies to reconsider business with China

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Stocks tumbled on Wall Street after U.S. President Donald Trump said he 'hereby ordered' U.S. companies to consider alternatives to doing business in China. He also said he would respond to Beijing's latest tariff increase later Friday.

In this June 29, 2019, file photo, U.S. President Donald Trump, left, meets with Chinese President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan. Stocks tumbled on Wall Street after U.S. President Donald Trump said he "hereby ordered" U.S. companies to consider alternatives to doing business in China. He also said he would respond to Beijing's latest tariff increase later Friday.

The developments mark the latest escalation of an ongoing trade dispute. The U.S. has said it would impose 10% duties on the $300 billion of Chinese goods that were not already subject to tariffs in two steps, On Sept. 1 and Dec. 15. Early Friday China said it would retaliate with taxes on $75 billion of U.S. products along the same timeframe.

Some economists saw Powell's speech as setting the stage for further interest rate cuts this year. A quarter-point rate cut reduction in September is considered all but certain. Some think the Fed will cut rates again in December. The S&P 500 was down 2.1% as of 1:44 p.m. Eastern Time. The Dow Jones Industrial Average lost 499 points, or 1.9%, to 25,756. The average was briefly down 549 points. The Nasdaq dropped 2.6%.Technology companies, which have much to lose in the trade battle, bore the brunt of the sell-off. Apple slid 4.6% and Microsoft gave up 3.1%. Chipmaker Nvidia dropped 4.8%.Energy stocks headed lower along with crude oil prices. The price of crude sank 3.2% to $53.

 

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