Published: Mon, March 05, 2018
Markets | By Josh Butler

United States stocks join global selloff on trade war fears

United States stocks join global selloff on trade war fears

The Nasdaq composite fell 127 points, or 1.8 percent, to 7,142.

Volatility returned to markets during February with a vengeance.

Shares of auto makers and other big consumers of steel and aluminum added to their session losses after Trump said the USA would impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum next week, while shares of US steel and aluminum companies jumped.

Equity markets in Paris, Frankfurt and Tokyo all lost more than two percent as U.S. trading partners and several leading industry groups criticized Trump's plan.

Shares of US steel makers ― AK Steel, US Steel Corp and Nucor ― jumped on prospects of import tariffs.

Detrick also said that investors were anxious about retaliatory tariffs from China.

"It's always a concern about what's the retaliatory response to this". His address to congress signalled the Fed will keep raising interest rates to contain inflation. The Nasdaq declined 1.9 percent, its biggest monthly percentage fall since October 2016.

Futures for the S&P 500 index, Nasdaq 100 and Dow Jones industrial average were mixed early Friday morning after President Trump's vow to impose steel tariffs triggered a sell-off on Thursday.

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The Standard & Poor's 500 index fell 3 points, or 0.1 percent, to 2,710.

The basket of 30 blue-chip stocks dropped 380 points, finishing down 1.5 percent on the day and down 4.3 percent for the month.

As a candidate, Trump often campaigned on an "America First" trade policy, but hadn't taken many steps to implement that since he took office.

THE QUOTE: "Federal Reserve Chairman Powell erred to the hawkish side and had speculation running rampant that the Feds will trigger quicker pace of interest rate increases as the economy accelerates", says Stephen Innes, head of trading at Oanda, referring to remarks earlier in the week that has the market anticipating higher interest rates in the U.S.

Indexes edged lower following Dudley's remarks, but investors said it was the tariff issue that drove the afternoon selloff.

"You had a pretty big downdraft yesterday for this and we still don't know the details", said Art Hogan, chief market strategist at Wunderlich Securities.

About 8.1 billion shares changed hands on US exchanges. Volume was almost 19 million compared to the daily average volume of roughly 3.5 million.

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