Investing.com – Wall Street traded sharply lower on Monday as threats from U.S. President Donald Trump to increase tariffs on Chinese goods pummeled risk sentiment.
The sank 383 points, or 1.5%, at 26,121.48 points by 9:35 AM ET (13:35 GMT), the fell 40 points, or 1.4%, to 2,905.38 points, while the tech-heavy traded down 135 points, or 1.7%, at 8,028.77 points.
Trump threatened to imported to the U.S. to 25% by this Friday, complaining that trade talks were moving too slowly due to Beijing’s attempts to renegotiate.
Early reports suggested that China was considering cancelling the trade talks due to take place in Washington starting on Wednesday in response to Trump’s weekend tweets, but the Chinese Foreign Ministry later confirmed that .
Chinese officials did not confirm however that China’s top negotiator, Vice Premier Liu He, would still attend.
Trump’s tweets surprised markets as reports of last week’s trade talks in Beijing suggested that progress was being made, with talk of a deal being reached by the end of May with a possible summit to sign off on the agreement considered a possibility as soon as June. Some analysts speculated that the threats were a tactic to increase pressure on China ahead of this round of negotiations.
Concerns over the impact of a full-blown trade war sent global equities lower, with Chinese stocks posting their biggest one-day loss in three years and European bourses all losing between 1% and 2%.
Particularly sensitive were stocks of companies with high revenue exposure to China such as Apple (NASDAQ:) or chipmakers Advanced Micro Devices (NASDAQ:) and NVIDIA (NASDAQ:). The slid 2.6%
In other company news, Kraft Heinz (NASDAQ:) was under pressure after the company announced it would to fix accounting errors due to the misconduct of several employees.