US stocks slammed as trade war escalates
AFP, New York :
Wall Street stocks finished a bruising session sharply lower Friday, as fresh volleys between Washington and Beijing escalated a grinding trade war and exacerbated recession fears.
The Dow sank more than 600 points, or 2.4 percent, to 25,628.90, pushing the blue-chip index into the red for the fourth straight week.
European stocks also had a rocky day, turning sharply downward after US President Donald Trump vowed a forceful response to a Chinese announcement raising tariffs on $75 billion in US goods.
Trump followed through on the threat after the US market closed Friday, raising the existing and planned tariffs by five percent. Tariffs on $250 billion Chinese goods will go to 30 percent and those planned on $300 billion in Chinese goods go to 15 percent from October 1.
Gorilla Trade strategist Ken Berman said that "until now, the majority of analysts expected a deal, but the steep drop in risk assets shows that investors started to 'price in' the possibility of a prolonged conflict."
The escalation of the trade war comes amid rising recession fears, with Britain and Germany both reporting negative growth in the second quarter and China's economy slowing. Strong consumer spending has buoyed the US economy, even as manufacturing has sagged.
The tit-for-tat trade announcements come ahead of a G7 summit this weekend in France, with tensions mounting between Trump and the Europeans, Canada and Japan over trade tariffs.