U.S. The markets died on Monday when China said it would raise steep rates of $ 60 billion in US goods and boost the efforts of a trade war that threatens to destroy the world economy.
Dow Jones industrial average is more than 500 points, around 2 percent in morning trading, as investors feared that trade distance with China could escalate into a full-blown economic crisis – dragging US and world economies into recession.
The Standard & Poors 500 index was down 2.0 percent and the tech- nical Nasdaq Composite fell more than 2.6 percent, last week's losses continued.
"Today's abbreviation in US / China trade tariffs has exacerbated tumbling futures out of fear that tensions may trigger a global downturn," said Sam Stovall of CFRA Research.
The drama began last week after President Trump last week imposed a 25 percent tariff of $ 200 billion of Chinese imports into the United States. He also told helpers to start planning to beat over $ 300 billion in other Chinese goods.
Asian markets were down by more than 1 percent, with the Shanghai Composite dropping 1.2 percent and Japan's Nikkei 225 down just shy of 1 percent. The European markets were down the table, with; German Dax leads the decline, by 1.5 per cent.
Add to the pressure on stocks was a Saudi news report that said two Saudi oil tankers had been attacked with "significant damage" in coastal waters near the Persian Gulf and increased the tension with Iran
The tankers were subjected to "sabotage action" early Sunday morning in the waters off the United Arab Emirates coast, according to a statement by the Saudi Minister of Energy, Industry and Minerals, Khalid Al-Falih bar
Saudi Arabia did not say who was responsible for the attack, which did not cause cases or oil spill, according to the statement.
Oil futures are on the news, with US reference West Texas Intermediate climbing 1.6 percent and Brent raging nearly 2 percent.
"Stock investors are in risk-free mode this morning as Trump's trade war with China appears to be escalating while negotiations seem to be breaking down," said Ed Yardeni, president of Yardeni Research. "Adding to the geopolitical turmoil is increasing the tension in the Middle East after sabotage of Saudi oil tankers over the weekend."
The president has claimed that the Chinese government is ripping off US consumers and businesses by unjustifiably subsidizing Chinese companies, stealing intellectual property from US companies, and flooding global markets with cheap goods to put other companies out of business.
On Monday, he warned China against retaliation at rates in a series of early morning tweets. But China counteracted its own tariffs. The Chinese government said it would impose tariffs on US imports from June 1, with the most severe penalties that hit certain steaks, live plants, colored flowers, and a variety of fruits and vegetables. The tariffs will vary from 5 percent to 25 percent.
Monday's skid comes on the heels of the first weekly decline in 2019 in US stocks.
S & P 500 real out a win on Friday on speculation, escalation will not track global economic growth, mating its loss for the week to 2.2 percent. It's the steepest drop since the five days ended December 21, when the shares tumbled against a bear market. The Dow Jones industrial average fell 2.1 percent to 25,942. Apple Inc. was among the worst decliners in the 30-member target when the iPhone manufacturer's close ties to China risked profits. The Nasdaq Composite Index fell 3 percent.
Sales start began Monday after Trump's weekend tweets threatened with more than double the $ 200 billion of Chinese goods, which he then followed. Equities was held on a Friday on Friday with renewed optimism that an all-out trade war can be averted.
Stocks in all 11 major industrial groups ended last week lower, with technology and industrial companies sinking most when Beijing promised to oppose the fresh US tariffs.
This is an evolving story and will be updated.