Wall St. falls as White House vows to raise China tariffs

NEW YORK (Reuters) – U.S. stocks fell on Monday after President Donald Trump pledged to raise tariffs on Chinese goods, though Wall Street finished well off its session lows as some investors saw Trump’s comments as a bargaining tactic and expressed confidence in an eventual trade agreement.

After the closing bell, however, equity index futures took a fresh hit after senior U.S. trade officials said China had reneged on its previous commitments and the tone of negotiations had soured.

S&P e-minis were last down 0.60% after resuming trading for the overnight session, a signal that investors expect the market to open lower on Tuesday.

U.S. Trade Representative Robert Lighthizer said the Trump administration would “probably” publish a notice on Tuesday about plans to raise tariffs on $200 billion worth of Chinese goods to 25% from 10%.

In a surprise tweet on Sunday, Trump said the higher levies would go into effect on Friday if no deal with China was sealed. His comments triggered a global sell-off in stocks and inflamed fears of a slowdown in global growth, fears which have periodically roiled markets over the past year.

The benchmark S&P 500 fell as much as 1.6% during the session while U.S. Treasury yields dropped as investors turned to low-risk government bonds.

Yet the major indexes recovered much of their losses in afternoon trading as some investors remained hopeful that a trade agreement would soon be reached. The S&P 500 ended the day down 0.45%.

“It seems like a negotiating stance,” said David Lefkowitz, senior Americas equity strategist at UBS Global Wealth Management’s chief investment office in New York. “Our base case still is that China and the United States do find common ground.

A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S.,

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