US stocks fall on latest Trump trade threat on China

Traders work on the floor of the New York Stock Exchange.
Traders work on the floor of the New York Stock Exchange.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks dropped on Friday (Sept 7) after President Donald Trump threatened to impose tariffs on all imports from China, escalating an ongoing trade fight.

The Dow Jones Industrial Average fell 0.3 per cent to close the week 25,916.54, improved from the worst level of the day, while the broad-based S&P 500 shed 0.2 per cent to 2,871.68.

The tech-rich Nasdaq Composite Index declined 0.3 per cent to end at 7,902.54, and is down 2.6 per cent for the week.

The US has punitive tariffs on US$50 billion (S$70 billion) in Chinese goods already in place, and another US$200 billion "in the hopper" that Trump said "could take place very soon."

But Trump told reporters on Air Force One that "there's another US$267 billion ready to go on short notice if I want."

That would cover virtually all the goods imported from the world's second largest economy.

Although stocks hit session lows just after the remarks were reported, the major indices cut their losses before the close.

"If there were dramatic worries (about the trade war) you would see the market down even more, but it isn't," said Quincy Krosby, chief market strategist of Prudential Financial.

 
 

"The major question would be: is the US economy strong enough to absorb these rates?"

US stocks opened mixed after the September jobs report topped expectations on new positions added.

However, some analysts expressed anxiety after stronger-than-expected wage growth boosted the odds of more aggressive Federal Reserve interest rate hikes.

Among individual companies, Tesla Motors fell 6.3 per cent after a pair of executive departures added to uncertainty surrounding the electric car maker a day after chief executive Elon Musk appeared in an interview smoking marijuana.