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US stocks plunge as Trump vows new retaliation against China

Aug 23 2019 20:31

New York, Aug 23, 2019 (AFP) -Wall Street stocks plunged deep into the red Friday morning after US President Donald Trump threatened new retaliation against China in response to Beijing's latest tariff announcement.

Near 1615 GMT, the Dow Jones Industrial Average was down 1.6%, or around 400 points, at 25 845.22.

The broad-based S&P 500 dropped 1.7% to 2 874.82, while the tech-rich Nasdaq Composite slid 2.0% to 7 829.92.

Trump lashed out on Twitter vowing to respond to China's latest tariff announcement this afternoon, but he addressed leading US companies in the country, including UPS and Amazon.

"Our great American companies are hereby ordered to immediately start looking for an alternative to China," Trump tweeted.

"We don't need China, and, frankly would be far ... better off without them."

The outburst came after Beijing announced punitive tariffs targeting $75bn worth of US imports and ranging from five percent to 10 percent on 5,078 items, in response to Trump's latest round of tariffs on Chinese good due to take effect in two steps, September 1 and December 15.

Trump also reacted angrily to a widely-anticipated address by Federal Reserve Chair Jerome Powell in which the Fed chief pledged to act to ensure that the US economic expansion continued, but avoided specific promises, including Trump's call for deep interest rate cuts.

"As usual, the Fed did NOTHING!" Trump said on Twitter.

"My only question is, who is our bigger enemy, Jay Powel or chairperson Xi?" Trump said, misspelling the Fed chief's name in the unprecedented attack.

Art Hogan, chief market strategist at National Securities, said the latest in Trump's almost daily attacks on Powell and the Fed is far more severe.

"When the president attacks the his own nominated chair and calls him an enemy, that is a whole new flavor of aggression, and not one any of us have seen in our lifetime," Hogan said.

Hogan said the tweetstorm about China was also troubling. While the mandate to US companies to exit China may amount to little more than rhetorical bluster, "things are getting worse, not better" on trade.

equities  |  wall street  |  markets
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