New York, Dec 3 (AFP/APP): Wall Street stocks tumbled Monday after President Donald Trump announced new tariff actions on Brazil and Argentina and US manufacturing showed further sign of weakness.
Trump said he was reinstating tariffs on steel and aluminum from the South American countries due to a devaluation of their currencies. The United States had previously exempted some countries, including Argentina and Brazil, which agreed to quotas on the metals.
The Dow Jones Industrial Average ended down one percent at 27,783.79.
The broad-based S&P 500 shed 0.9 percent to close at 3,113.90, while the tech-rich Nasdaq Composite Index fell 1.1 percent to 8,567.99.
Gregori Volokhine of Meeschaert Financial Services said Trump’s move on Argentina and Brazil “rattled” the market because it directly linked tariffs to currency movements, a threat that Trump has previously floated with China but not acted on.
“You can imagine where Trump might do the same thing against Europe because it let the euro weaken,” Volokhine said.
Volokhine also said inventors are unnerved because the US-China trade war remains “far from being resolved.”
China suspended US warship visits and sanctioned American NGOs after Trump signed into law a congressional measure supporting pro-democracy protesters in Hong Kong.
Some analysts rated the Chinese measures as mostly symbolic but said they were potentially important in light of continuing trade talks between Washington and Beijing.
Analysts also cited a fourth straight monthly decline in manufacturing sector activity following a disappointing report by the Institute for Supply Management.
The data suggest that the manufacturing sector might weaken further. “So the consumer economy would have to remain robust to sustain growth in the US,” Gorilla Trades strategist Ken Berman said in a note to clients.
The ISM report on manufacturing will be followed later in the week by an ISM reading on the services sector, as well as the November jobs report from the Department of Labor.