© Reuters. Traders work on the floor of the NYSE in New York
By Noel Randewich
SAN FRANCISCO (Reuters) – Wall Street has taken the China-U.S. tariffs enacted on Friday in stride so far, but investors are on alert for a ramp-up in the trade conflict.
Stock investors had been bracing for weeks for Washington and Beijing to place the tariffs on $34 billion of each other’s goods, and share prices were occasionally hurt by escalations in rhetoric along the way, with certain sectors taking a bigger hit than others as traders avoided companies seen taking the heaviest blows.
Another round of sweeping tariffs could knock Wall Street off track. U.S. President Donald Trump on Thursday upped the ante on his country’s largest trading partner, warning the United States may ultimately target more than $500 billion worth of Chinese goods, roughly the total amount of U.S. imports from China last year.
“The real question is, how long do we stay in the trade war?” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “If we got to that point (of escalation), all bets are off for any continuation of the bull market.
The S&P 500 () rose nearly 1 percent on Friday, with traders saying they had priced in the United States and China enacting tit-for-tat duties.
The S&P 500 is still up 3 percent year to date and the Nasdaq () is up 11 percent, near record highs.
The specter of a full-blown trade war also risks sinking China’s markets deeper into bear territory. Six months of wrangling over tariffs with the United States has wiped out about a fifth of China’s stock market value.
U.S. stocks have been in a bull run for nearly a decade, with the latest leg driven by a U.S.