U.S. markets fell on Tuesday over the fear of an impending trade war between the world’s largest economies after Donald Trump’s latest threat to China.
The Dow Jones Industrial Average fell 287.26 points, or 1.15 percent, to 24,700.21, wiped out gains for the year with a six-day losing streak, the longest since March 2017.
The S&P 500 decreased 11.18 points, or 0.40 percent, to 2,762.57. The Nasdaq Composite Index fell 21.44 points, or 0.28 percent, to 7,725.59.
The Dow's triple-digit losses were mainly led by the decline of Boeing and Caterpillar. The shares of Boeing and Caterpillar dropped 3.84 percent and 3.62 percent, respectively, at market closing. The two stocks are sensitive to trade tensions since they have a large portion of overseas business.
Meanwhile, shares of U.S. chipmakers Nvidia and Qualcomm fell 1.86 percent and 0.84 percent, respectively.
Futures also reacted instantly to the escalating trade tension. Chicago Board of Trade (CBOT) futures settled significantly lower on Tuesday with soybeans falling to a two-year low amid escalating trade tensions.
The most active soybean contract for July delivery fell 19.5 cents, or 2.15 percent, to settle at 8.89 U.S. dollars per bushel. July corn went down 2.25 cents, or 0.63 percent, to close at 3.5375 U.S. dollars per bushel. July wheat was down 12.25 cents, or 2.50 percent, to settle at 4.7775 U.S. dollars per bushel.
CBOT brokers reported that funds sold 12,000 contracts of soybeans, 7,000 contracts of wheat and 17,000 contracts of corn on Tuesday.
During the Tuesday morning session, CBOT soybeans once lost more than 5 percent, but saw some recovery later. Still, the price at close reached the lowest level since March, 2016.
After unveiling plans to impose additional tariffs on Chinese goods worth around 50 billion U.S. dollars, the White House went further by threatening to identify 200 billion U.S. dollars worth of Chinese products for additional tariffs.
China is a major buyer of U.S. soybeans. A spokesperson of China's Ministry of Commerce said Tuesday that if the U.S. loses its rationality and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back.
AgResource, an agricultural advisory and research firm based in Chicago, estimates that in the past two weeks, U.S. farmers have lost more than 100 U.S. dollars per acre in revenue as a result of the fall in crop prices.
(With inputs from Xinhua)
