US stocks move broadly lower as new China tariffs kick in
NEW YORK (AP) — Stocks fell broadly on Wall Street Tuesday as markets opened after a long weekend to expanded tariffs between the U.S. and China.
Technology companies led the decline. The sector is particularly sensitive to swings in trade relations with China and tariffs have the potential to drive up costs for gadget and chipmakers. Apple, which relies on China as a key part of its supply chain, fell 1%, while chipmaker Nvidia fell 1.5%.
On Sunday, the U.S. started charging a 15% tariff on about $112 billion of Chinese products. China responded by charging tariffs of 10% and 5% on a list of American goods. U.S. markets were closed on Monday for Labor Day.
Industrial stocks were among the biggest decliners. Caterpillar, which is seen as an industry bellwether when it comes to the impact of trade, fell 1.8%.
Oil prices fell 3.5% and dragged energy stocks lower. Chevron dipped 1.8%.
Investors fled to safer holdings, including utility stocks, bonds and gold.
Utilities wobbled between small gains and losses, while the price of gold rose 1.5%. Bond prices rose, sending yields lower. The yield on the 10-year Treasury fell to 1.44% from 1.50% late Friday.
The latest escalation in the lingering trade war has been expected since early August when the U.S. announced plans for the new tariff measures, prompting China to retaliate. The worsening trade situation between the world's two largest economies dragged the S&P 500 to its second monthly loss of the year in August and dented investors' confidence in global economic growth.
The U.S. and China are supposed to meet in September to continue trade negotiations, but investors have grown pessimistic that any resolution will be forthcoming in the near future.
KEEPING SCORE: The S&P 500 fell 1% as of 10:05 a.m. Eastern Time. The Dow Jones Industrial Average fell 352 points, or 1.3%, to 26,050. The Nasdaq fell 1%.
OVERSEAS: European stocks fell broadly and the British pound dropped to its lowest level against the U.S. dollar in 34 years, excluding a brief "flash crash" in 2016 that may have been caused by technical glitches, as the U.K. faces a potentially chaotic exit from the European Union. Prime Minister Boris Johnson's office said he would call an early election if his opponents pass legislation that would block his plans to leave the European Union by an Oct. 31 deadline.
Asian markets were mixed.
PROS FOR CONN'S: Conn's jumped 13.3% after the furniture and electronics retailer blew past Wall Street's second quarter profit forecasts. The company also topped analysts' revenue expectations.