By CCN: The US stock market plummeted during the week’s final trading session, as the Dow and Wall Street’s other major indices reeled from yet another escalation to the US-China trade war.
Dow Reels After Beijing Unloads on Trump Administration
Stock futures traded sharply lower ahead of Friday’s opening bell. Dow Jones Industrial Average futures lost 190 points or 0.73%, implying a 182.68 point decline. S&P 500 futures dropped 0.72%, while Nasdaq futures shed 0.98% during a chilly morning on Wall Street.
A fearful stock market shivered after China’s government bared its teeth in the rapidly-escalating trade war.
Citing comments in state-run Chinese news agency Xinhua, CNBC reports that a spokesperson for the Chinese Ministry of Commerce blamed the United States for derailing the trade negotiations.
“The two sides had open and constructive communication during the 11th round of the China-U.S. high-level economic and trade consultations,” spokesperson Gao Feng said. “However, it is regrettable that the US side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks.”
The spokesperson further attacked President Trump and his administration for exhibiting “bullying behavior” in their handling of the negotiations, adding that Beijing had no choice but to retaliate.
In addition to raising tariffs on hundreds of billions of dollars of Chinese goods, the Trump administration launched a targeted assault on Huawei that effectively blackballs the Chinese telecom giant from operating in the US.
Trade War Escalation Pressures Major Stocks & Reverses Recovery
The actions against Huawei aren’t expected to benefit US companies in the near-term. Beijing’s response could place severe pressure on major firms such as Apple, which already faces headwinds from the Trump’s tariff hikes.
Nomura Instinet slashed its Apple stock price target to $175 this morning, implying an 8% decline from AAPL’s previous-day close at $190.
“Apple could eat the tariffs (we estimate 15-20% EPS impact on its own), pass to US consumers (~4% impact), and squeeze suppliers (less room here than before). Trade tension hurt China iPhone demand this winter; we would assume the same would apply again,” Nomura analyst Jeffrey Kvaal wrote.
Friday’s stock market downturn reversed a fairly remarkable intraweek recovery.
On Thursday, the Dow soared 214.66 points or 0.84% to 25,862.68, completing the long march back from the more than 617 point plunge it endured on Monday. The S&P 500 jumped 25.36 points or 0.89% to 2,876.32, and the Nasdaq added 75.9 points or 0.97% to close at 7,898.05.
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