(Reuters) – Wall Street’s main indexes fell sharply on Monday, led by technology companies, as China’s willingness to let the yuan slide in response to the latest U.S. tariff threat fanned fears that it could further aggravate an ongoing trade war.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 2, 2019. REUTERS/Brendan McDermid

China let the yuan breach the key 7-per-dollar level for the first time in more than a decade on Monday, and President Donald Trump slammed it as “a major violation”.

Trump stunned financial markets last week by threatening to impose 10% tariffs on the remaining $300 billion of Chinese imports, abruptly abandoning a brief ceasefire.

“Trade continues to trend in the wrong direction. As in retaliation for new tariffs, China let the yuan move to a 10-year low versus the U.S. dollar,” said Ryan Detrick, senior market strategist for LPL Financial in Charlotte, North Carolina.

“Any hopes of a quick resolution with China are fading quickly.”

On Friday, the benchmark S&P 500 .SPX and the Nasdaq .IXIC suffered their worst weekly performance of 2019, in a week that also saw the U.S. Federal Reserve’s cut interest rates for the first time in a decade.

At 9:50 a.m. ET, the Dow Jones Industrial Average .DJI was down 505.65 points, or 1.91%, at 25,979.36, the S&P 500 .SPX was down 59.19 points, or 2.02%, at 2,872.86.

The Nasdaq Composite .IXIC was down 213.46 points, or 2.67%, at 7,790.61.

All of the 11 major S&P sector were in the red. The S&P technology sector .SPLRCT, heavily exposed by its chipmakers and other global technology players to Chinese markets, dropped 3.2%.

Apple Inc (AAPL.O) slid 4.1% as analysts expected the newly proposed tariffs to hurt demand for its flagship iPhone, while the Philadelphia chip index .SOX slipped 3.5%.

Industrial bellwethers Boeing Co (BA.N) and Caterpillar Inc (CAT.N) shed more than 2%.

Signals from the bond market were also daunting as the inversion of the yield curve between the three-month Treasury bill US3MT=RR and 10-year bonds US10YT=RR grew to the widest since April 2007. [US/]

Interest-rate sensitive banks .SPXBK dropped 3%.

The CBOE Volatility index .VIX, a gauge of investor anxiety, rose to its highest level in about three months at 21.71 points.

The rest of the high-flying FAANG group also lost ground. Facebook Inc (FB.O), Amazon.com Inc (AMZN.O), Netflix Inc (NFLX.O) and Google-parent Alphabet Inc (GOOGL.O) were down between 2.3% and 2.7%.

FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

More than three quarters of S&P 500 companies have reported results so far, with about 74% topping analysts’ expectations for profit, according to Refinitiv IBES data.

No.1 U.S. meat processor Tyson Foods Inc (TSN.N) rose 4.7% after beating quarterly profit estimates.

Declining issues outnumbered advancers for a 7.11-to-1 ratio on the NYSE and for a 7.20-to-1 ratio on the Nasdaq. The S&P index recorded two new 52-week highs and 19 new lows, while the Nasdaq recorded six new highs and 153 new lows.

Reporting by Medha Singh and Arjun Panchadar in Bengaluru; editing by Patrick Graham, Anil D’Silva and Sriraj Kalluvila

Our Standards:The Thomson Reuters Trust Principles.

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