US markets drop as trade war threats heat up

Courtney Goldsmith
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Dow Plunges Over 400 Points On News Of New Steel And Aluminum Tariffs
US stocks sank as the markets opened (Source: Getty)

US stocks started the day on the back foot as fears of a looming trade war grew.

At the time of writing, the Dow Jones Industrial Average was down 0.84 per cent at 24,676.22, while the S&P 500 was down 0.63 per cent and the tech-heavy Nasdaq was down 0.34 per cent.

"The sharp downturn when Wall Street opened today hints at the uncertainty that the threat of a trade war is already causing for markets – which could spell very bad news for traders," said Dennis de Jong, managing director at UFX.

On this side of the pond, miners were among the FTSE's top fallers today.

Some of the world's biggest miners, including Glencore, BHP Billiton and Anglo American, shed between two and three per cent in early afternoon trading.

Antofagasta, Fresnillo, Rio Tinto and Randgold Resources were also down more than one per cent on the blue-chip index.

It followed news last night that a key economic adviser to US President Donald Trump, Gary Cohn, had resigned. Cohn, a free-trade advocate, is said to have resigned over a dispute with Trump over the President's planned tariffs on steel and aluminium imports.

The shock resignation rocked global markets and sent the US dollar down.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said the move was not likely to have a long-term impact on the stock markets or risk appetite – "unless Trump does step up the trade war narrative", that is.

The EU reiterated a warning today that it would launch new tariffs on US exports like bourbon, peanut butter and motorbikes if Trump moves ahead with the introduction of a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium. A formal announcement is expected to come out of the US this week.

Read more: Peanut butter, orange juice, bourbon, steel: EU warns of US tariffs

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