Dow, stocks pare losses in afternoon trading after Trump's trade threat to China

It looked like it could have been a bloodbath, but by the end of trading Monday, investors largely shrugged off President Donald Trump’s trade threat to China over Twitter.

Stocks finished lower but pared much of their earlier losses, and fears of escalating trade tensions between the two countries abated.

“We have watched these blusterings in real time before. Trump’s tweets have a tendency to reverse themselves,” said Jamie Cox, managing partner for Harris Financial Group. “We have all been conditioned to wait and see.”

The Dow Jones Industrial Average dropped 66 points, or 0.25%, to end at 26,438 on Monday. The S&P 500 index lost 13 points, or 0.45%, to close at 2,932. The tech-heavy Nasdaq fell almost 41 points, or 0.5%, to finish at 8,123.

For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….

— Donald J. Trump (@realDonaldTrump) May 5, 2019

….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!

— Donald J. Trump (@realDonaldTrump) May 5, 2019

That’s a far cry from the market open when the Dow gave up 344 points as jittery investors dumped stocks.

Trump tweets on trade

On Sunday, Trump said in a tweet that he would raise tariffs to 25% from 10% on $50 billion in tech imports and $200 billion on other imports, starting Friday. He also suggested imposing a 25% duty on another $325 billion of imports

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