A Twitter post from the "People's Daily", an English-language news organization controlled by the Chinese government, said Sunday that "China imposes tariffs on 128 items of imports from the US including pork and fruit products starting Monday as a countermeasure in response to a previous USA move to slap tariffs on steel and aluminum imports: Ministry of Finance". The index, the Federal Reserve's preferred measure of inflation, has been below the US central bank's 2 percent target since mid-2012. The Dow Jones Industrial Average fell 2.4% while the S&P 500 was down 2.6%. The S&P 500 index and Nasdaq lost 2.2 and 2.7 percent each, falling into correction range, a 10-percent drop from their 52-week highs. The Russell 2000 index of smaller-company stocks fell 34 points, or 2.3 percent, to 1,494.
Shares of Amazon traded 0.7 percent stronger as of 1.55pm in NY, having fluctuated between gains and losses earlier in the day, as investors tried to assess the impact of US President Donald Trump's latest criticising tweets about the company.
The Nasdaq is down 33.27 points, or 0.5 percent.
The price of gold climbed 1.2 percent to $1,343.60 an ounce and silver jumped 2 percent to $16.60 an ounce as some investors took money out of stocks and looked for safer investments.
China's latest step is just one point of contention between China and Washington, Europe and Japan over a state-led economic model they complain hampers market access, protects Chinese companies and subsidizes exports in violation of Beijing's free-trade commitments.
Investors will also be watching the testimony of Facebook leader Mark Zuckerberg before Congress on Tuesday and the possibility of further attacks against Amazon by President Trump through his Twitter account. Coper rose 1 cent to $3.06 a pound.
Trump on Monday again criticized the e-giant's tax treatment as well as its its use of the United States Postal Service, tweeting: "Only fools, or worse, are saying that our money losing Post Office makes money with Amazon". Technology stocks were the biggest drags of the day; the sector lost 2.6%, with Google-parent Alphabet Inc. down 3.1% and Microsoft Corp. shedding 3.3%. Snap fell 8 percent over planned layoffs. He then proceeded to exempt most major US trading partners from the levies, leaving the bulk of the measures aimed squarely at Beijing.
Trump has approved possible higher US duties on $50 billion of Chinese goods in response to complaints that Beijing steals or pressures foreign companies to hand over technology. It wasn't the only market favorite to fall out of favor Monday. The company said Friday, after the markets closed, that a recent fatal crash of one of its cars involved an activated Autopilot. CBS rose 2.5 per cent. Germany's DAX Index dropped 0.8 percent, the UK's FTSE 100 Index slid 0.4 percent, while France's CAC40 Index declined 0.3 percent. Hong Kong's Hang Seng bucked the trend, ending up 0.2 per cent at 30,137.49.
The dollar declined to 105.67 yen from 106.50 yen.
COMMODITIES: Benchmark U.S. crude lost $1.71, or 2.7 percent, to $63.23 a barrel in NY. The euro fell to $1.2267 from $1.2300.