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

Stocks pared earlier losses in afternoon Monday trading following an initial drop on President Donald Trump’s threats on Sunday to hike tariffs on Chinese imports. The comments initially worried investors that trade tensions between the two countries were escalating.

“Trump’s China comments ruffled investors’ feathers as this continues to be the biggest risk factor in the market, especially for tech stocks,” said Daniel Ives, managing director of equity research for Wedbush Securities. “But I think investors think that the bark is worse than the bite, that this is more negotiation tactic rather than a structural change in U.S.-China negotiations.”

“That’s why we’ve seen stocks recover some [from the open],” Ives said.

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

The Dow Jones Industrial Average dropped 185 points, or 0.7%, to 26,320 in afternoon trading. The S&P 500 index fell 23 points, or 0.78% to 2,923. The tech-heavy Nasdaq lost 74 points, or 0.9%, to 8,090.

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 that aren’t currently taxed.

He doubled

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