Wall St opens sharply lower on trade war fears

  • Markets
  • Friday, 02 Mar 2018

It noted that CSC Steel

NEW YORK: U.S. stocks opened sharply lower on Friday as investors fretted President Donald Trump had launched a global trade war with his promise to impose import tariffs on steel and aluminum.

The Dow Jones Industrial Average fell 278.93 points, or 1.13 percent, to 24,330.05. The S&P 500 lost 21.96 points, or 0.820116 percent, to 2,655.71. The Nasdaq Composite dropped 78.61 points, or 1.09 percent, to 7,101.95. 

Earlier, the spectre of a global trade war sent world stocks tumbling towards a 2.5 percent weekly loss on Friday, and left bruised investors reaching for the traditional antidotes - government bonds, gold and the Japanese yen.

The falls came after Trump said the United States would impose tariffs of 25 percent on imported steel and 10 percent on aluminium, sparking concerns of retaliatory moves from major trade partners China, Europe and neighbouring Canada.

Europe's STOXX 600 index fell over 1.5 percent led by a near 5 percent slump from world's biggest steelmaker ArcelorMittal SA and 2.5 - 6 percent drops from the region's carmakers worried that they might be next.

"Trade wars are good, and easy to win," Trump's first Friday tweet said, which only acted to inflame the markets' nerves.

The dollar and U.S. Treasury yields both fell as they appeared to push aside considerations of inflation, a major theme that spooked financial markets over the last month.

Ten-year U.S. Treasuries yields dipped to 2.8024 percent, hitting its lowest level in three weeks and further extending the distance from its four-year peak of 2.957 percent touched on Feb 21.

The dollar fell across the board including to more than one year low against the yen at 105.54.

"It is a real worry because Europe is a open global economy so it isn't just about U.S. versus China," said Ian Ormiston, a European equity fund manager at Old Mutual Global Investors about Trump's moves. "And we will see retaliation there are no two ways about it."

Europe's market moves compounded what was already a fragile mood ahead of a crunch few days of politics. - Reuters
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