(NEW YORK) — Stocks tumbled Monday after China raised import duties on a number of U.S. exports, bringing the two economic giants closer to a full-on trade conflict. Big technology companies, long investor favorites, suffered heavy losses.
The deepening worries over newly protectionist U.S. trade policies combined with blowback toward technology companies, including Facebook’s ever-widening privacy scandal, have prompted investors to pull money out of the market. That has meant steep drops in former big winners including Netflix, Microsoft and Alphabet, Google’s parent company.
Among other recent winners, Intel dove 6.1 percent following a report in Bloomberg News that Apple plans to start using its own chips in Mac computers, and Amazon sank following more broadsides from President Donald Trump on Twitter.
The Dow Jones industrial average fell as much as 758 points, although major indexes regained some of their losses later in the afternoon. The Dow lost 458.92 points, or 1.9 percent, to 23,644.19. The S&P 500 index gave up 58.99 points, or 2.2 percent, to 2,581.88.
The Nasdaq composite slumped 193.33 points, or 2.7 percent, to 6,870.12. The Russell 2000 index of smaller-company stocks fell 36.90 points, or 2.4 percent, to 1,492.53.
Kate Warne, an investment strategist for Edward Jones, said the step by China is small but significant.
“The fact that a country has actually raised tariffs in retaliation is an important step in the wrong direction,” she said. “The tariffs imposed by China today lead to greater worries that we will see escalating tariffs and the possibility of a much bigger impact than investors were anticipating last week. And that could be true for Mexico as well as for China.”
Food maker Tyson dropped 6.2 percent after China raised import duties on a $3 billion list of U.S. goods in response to the tariffs on imported steel and aluminum that President Trump ordered last month.
Amazon fell another 5.2 percent. The online retailer has slumped with the market recently, although it’s still up about 17 percent in 2018. Trump has repeatedly criticized Amazon over issues including taxes and Amazon’s shipping deals with the U.S. Postal Service.
Jack Ablin, chief investment officer of Cresset Wealth Advisors, said Amazon is just the latest company to falter after it drew scrutiny from the government, as Facebook and Alphabet have slumped recently on data privacy concerns.
“It seems like the long arm of the government is interfering with investors’ expectations,” he said. “Investors are pricing in an escalating trade war and regulation of tech companies.”
Microsoft dropped 3 percent and Alphabet, Google’s parent company, shed 2.4 percent.
After a month of public negotiations between the U.S. and several other countries, Monday marked the first time another country has placed tariffs on U.S. goods in response to the Trump administration’s recent trade sanctions.
The price of gold climbed 1.2 percent to $1,343.60 an ounce and silver jumped 2 percent to $16.60 an ounce as some investors took money out of stocks and looked for safer investments.
Health insurer Humana was one of the market’s few winners following more reports Walmart could buy the company or create a new partnership with it. Humana is a major provider of Medicare Advantage coverage for people 65 and older. Humana gained 4.4 percent while Walmart slid 3.8 percent.
Bond prices finished little changed. The yield on the 10-year Treasury stayed at 2.74 percent after a sharp decline last week.
Energy companies skidded as benchmark U.S. crude lost $1.93, or 3 percent, to $63.01 a barrel in New York. Brent crude, used to price international oils, slid $1.70, or 2.5 percent, to $67.64 a barrel in London.
Wholesale gasoline dropped 5 cents to $1.97 a gallon. Heating oil fell 4 cents to $1.98 a gallon. Natural gas slid 5 cents to $2.68 per 1,000 cubic feet.
Copper rose 2 cent to $3.05 a pound.
The dollar declined to 105.85 yen from 106.50 yen. The euro edged up to $1.23 from $1.2306.
Trading in France, Germany and Britain was closed for Easter. Japan’s benchmark Nikkei 225 lost 0.3 percent and South Korea’s Kospi fell almost 0.1 percent. The Hang Seng in Hong Kong was closed as well.