Dow Drops 600 as Trump Escalates China Trade War

Wall Street tumbled on Friday after the U.S.-China trade war escalated in dramatic fashion, with President Donald Trump demanding that American companies seek alternatives to doing business with China after Beijing announced its own slate of retaliatory measures.

All three major U.S. stock indexes ended the session sharply lower, posting their fourth consecutive weekly declines.

The latest exchanges in the long-running tariff row triggered a broad-based sell-off that hit shares of companies with high exposure to China the hardest, such as chipmakers and other top technology names. Dow Jones Industrials components Intel Corp and Apple Inc.

The developments overshadowed a highly anticipated speech from U.S. Federal Reserve Chair Jerome Powell, in which he reiterated a pledge the central bank would “act as appropriate” to support the economy, but he stopped short of committing to the series of rapid-fire rate cuts Trump has been demanding.

Trump’s tweeted response to the speech labeled Powell an “enemy.”

“(Trump) seems to be irate that China reacted to what the U.S. has done and is basically having a mini-tantrum and is angry at everybody,” said David Katz, chief investment officer at Matrix Asset Advisors in New York. “He’s angry at China, he’s trying to put the blame on the market and the economy on Powell.”

“But at this point, it’s very clear … that the issues that have been coming to fruition of late with the economy and the slowdown are all trade-related and have very little to do with the Fed,” Katz added.

Bernard Baumohl, managing director and chief global economist at the Economic Outlook Group in Princeton, agreed.

“The biggest folly is the belief that lowering interest rates by 25 or 50 bp will do anything to revive the economy,” Baumohl said. “Don’t ask the Federal Reserve to bail out the economy, because

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