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US: Stocks end down more than 3.0% on trade, growth worries
[NEW YORK] Wall Street stocks were pummeled Tuesday by worries over slowing US growth and trade conflict amid mounting skepticism over the US-China tariff truce.
The Dow Jones Industrial Average closed down 3.1 per cent, or almost 800 points, at 25,027.07.
The broad-based S&P 500 tumbled 3.2 per cent to 2,700.06, while the tech-rich Nasdaq Composite Index dived 3.8 per cent to 7,158.42.
A day after global stocks rallied on a weekend US-China announcement suspending new tariffs, global markets mostly pulled back as investor focus shifted to the murkiness over what was agreed to and the difficulty reaching resolution to disputes on thorny matters such as intellectual property.
"People are starting to dissect the reality to the tariff agreement," said Manulife AM Senior Portfolio Manager Nate Thooft.
US President Donald Trump appeared to be back in fighting mode after the weekend show of comity, saying he would "happily" sign a "fair" deal with China but was also ready to take a harder line.
"I am a Tariff Man," Mr Trump said on Twitter. "When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in US$billions in Tariffs. MAKE AMERICA RICH AGAIN."
The drop in US stocks also came amid a signal from bond markets that has traditionally been a precursor to a recession.
The difference in yield between the two- and 10-year US Treasury notes has narrowed sharply in recent days, raising concerns about a so-called "inversion" in which interest on short-term bonds overtakes the rate on long-term bonds.
A note from S&P Global Ratings predicted that US growth would slow from 2.9 per cent in 2018 to 2.3 per cent in 2019 and 1.8 per cent in 2020, adding that the US was nearing the "latter" stages of a multi-year growth cycle.
Large banks were among the big losers, with JPMorgan Chase shedding 4.4 per cent, Bank of America losing 5.4 per cent and Citigroup 4.4 percent.
Big technology companies also suffered, including Apple, which fell 4.4 per cent, Amazon, down 5.9 per cent and Microsoft, which lost 3.2 per cent.