Stocks tumble on trade fears in bad week
NEW YORK (AP) Stocks around the world plunged Friday as investors feared that a trade conflict between the U.S. and China, the biggest economies in the world, would escalate. A second day of big losses pushed U.S. stocks to their worst week in two years.
As of Friday afternoon, China's only response to the tariffs President Donald Trump announced this week was to say it would defend itself. But investors are concerned tensions will keep rising, and that a round of sanctions and retaliation will affect the global economy and corporate profits.
The Chinese government did say it might place tariffs on a $3 billion list of U.S. goods such as pork, apples and steel pipes. That was a response to the tariffs on steel and aluminum imports that Trump announced earlier this month.
The losses were widespread. Technology companies were pummeled. They have made enormous gains over the last year, but since they do so much business outside the U.S., investors see them as particularly vulnerable to the effects of a trade dispute.
Stocks sagged at the start of this month after the tariffs on aluminum and steel were announced, but they quickly recovered as the administration said the tariffs wouldn't be as severe as they first looked. The losses this week were worse, and investors are hoping for hints the sanctions on China are more of a negotiating tactic.
"There could be a possibility of a bounce back if, as this progresses, both sides look like they're negotiating," said Lisa Erickson, chief investment officer at U.S. Bank Wealth Management. "There could be further decline if people get a sense there could be more trade restrictions in place."
The S&P 500 index dropped 55.43 points, or 2.1 percent, to 2,588.26. The index skidded 6 percent this week, its worst since January 2016. The Dow Jones industrial average lost 424.69 points, or 1.8 percent, to 23,533.20. The Nasdaq composite fell 174.01 points, or 2.4 percent, to 6,992.67.