Stocks fall after Trump reportedly plans new tariffs on China

U.S. stocks skidded Thursday after a report that the Trump administration could put tariffs on $200 billion worth of Chinese goods as early as next week.

After a weak start, stocks fell further after Bloomberg News said the U.S. government was getting ready to ramp up its trade dispute with China. It has been threatening to tax $200 billion worth of Chinese imports for several months, which would represent a major escalation in the trade fight.

Major exporters including chemical companies and machinery makers took sharp losses. Technology companies also fell, while banks dropped along with interest rates and some weak second-quarter results hurt retailers.

According to Bloomberg, the administration could impose the 25% tariffs as soon as a public review period ends next week, but it could simply announce the tariffs and say they will take effect later.

China has threatened to retaliate with tariffs on $60 billion in goods from the United States and could take other measures as well.

“Markets have kind of gone to sleep on these things,” said Sameer Samana, a strategist for Wells Fargo Investment Institute. “We think this might take as long as a year or two to play out.”

Stocks were coming off a four-day surge that brought them to record highs as the United States appeared to make progress in trade talks with Mexico and Canada.

The Standard & Poor’s 500 index fell 12.91 points, or 0.4%, to 2,901.13. The Dow Jones industrial average fell 137.65 points, or 0.5%, to 25,986.92. The Nasdaq composite slipped 21.32 points, or 0.3%, to 8,088.36.

The Russell 2000 index of smaller-company stocks edged down 2.40 points, or 0.1%, to 1,732.35.

Construction equipment maker Caterpillar fell 2% to $139.06. Gold and copper miner Freeport-McMoRan slid 3.5% to $14.15, and steel producer Nucor fell 2% to $62.79. General Motors fell 2% to $36.36.

Discount retailer Dollar Tree plunged 15.5% to $79.78 after its quarterly profit and sales fell short of Wall Street projections. Investors were also concerned about the company’s forecast for the rest of the year.

Its competitor Dollar General declined 1% to $105.66 after it said its profit margins slipped.

Clothing retailer Abercrombie & Fitch dived 17.2% to $22.55 after its sales disappointed analysts. PVH, which owns the Calvin Klein and Tommy Hilfiger brands, sank 9.6% to $141.67.

Arts and crafts retailer Michaels fell 14.8% to $17.01.

While many other retailers struggled, Signet Jewelers soared 23.8% to $67.68 after its sales flew past expectations and it raised its forecasts for the year. Clothing and accessories retailer Tilly’s jumped 14.6% to $20.63 after its report.

Video game maker Electronic Arts dropped 9.8% to $115.94 after it said the release of a major game, “Battlefield V,” will be delayed four weeks. It also said the strong dollar is hurting its sales, and it cut a revenue forecast, citing those problems.

K2M Group leaped 26% to $27.50 after larger medical device maker Stryker agreed to buy it for $27.50 a share, or $1.2 billion. Stryker slipped 1.3% to $169.02.

Campbell Soup said it will sell its international and fresh-food businesses to pay down debt and will focus on its snack and soup business in North America. Investors appeared unenthusiastic about the proposal, and the stock fell 2.1% to $39.15.

Argentina’s peso plunged to another record low. The country’s central bank raised its primary interest rate to 60%, the highest in the world, to try to stop the sharp decline in the national currency. The peso has dropped more than 50% this year.

The Argentine Merval index jumped 5.2% after President Mauricio Macri said Wednesday that he is asking the International Monetary Fund for the early release of $50 billion in rescue funds for Argentina.

Other emerging-market stock indexes, including those in Brazil and Mexico, took losses.

Amazon stock inched up 0.2% to $2,002.38, its first close above the $2,000 mark. The online retail behemoth’s stock is up almost 600% in the last five years, including a gain of 71% so far in 2018. That has taken Amazon’s market value to almost $1 trillion. This month, Apple became the first publicly traded company to reach $1 trillion in value.

Oil prices rose. Benchmark U.S. crude rose 1.4% to $70.25 a barrel in New York. Brent crude, used to price international oils, rose 0.8% to $77.77 a barrel in London.

Wholesale gasoline rose 1.8% to $2.14 a gallon. Heating oil inched up 0.3% to $2.25 a gallon. Natural gas rose 0.4% to $2.87 per 1,000 cubic feet.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86% from 2.88%. That hurt banks, as lower yields mean long-term loans are less profitable.

Gold fell 0.5% to $1,205 an ounce. Silver sank 1.5% to $14.59 an ounce. Copper fell 0.7% to $2.71 a pound.

The dollar fell to 111.05 yen from 111.69. The euro fell to $1.1663 from $1.1699.

UPDATES:

2:50 p.m.: This article was updated with closing prices, context and analyst comment.

11:35 p.m.: This article was updated with the report that Trump wants to move ahead with more tariffs on goods from China.

This article was originally published at 7:35 a.m.