U.S. stocks finished lower Monday even in the wake of a dramatic comeback after President Donald Trump threatened over the weekend to increase tariffs on $200 billion of Chinese goods, raising fresh fears about a market-disruptive clash between the world’s largest economies.
The Dow and the broader market briefly dipped below apparent technical support at the 50-day moving average before bouncing back. Moving averages tend to be viewed by technical analysts as bullish and bearish demarcation points.
How did the benchmarks fare?
The Dow Jones Industrial Average DJIA, -0.25% slid 66.47 points, or 0.3%, to 26,438.48 after being down almost 500 points earlier in the session. The S&P 500 index SPX, -0.45% declined 13.17 points, or 0.5%, to 2,932.47, while the Nasdaq Composite Index COMP, -0.50% retreated 40.71 points, or 0.5%, to 8,123.29, after touching a Monday low near the open at 7,981.85.
What drove the market?
In a pair of tweets Sunday, Trump expressed frustration over the speed of trade talks with China and threatened to raise tariffs on $200 billion of Chinese goods by Friday to 25% from 10%. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” he wrote.
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
Trade negotiations were set to resume this week between the two countries and last week U.S. officials had seemed hopeful a deal was imminent. Beijing, which has in the past rejected pressure tactics from the U.S., said Vice Premier Liu