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Stocks fall as Trump escalates trade war with China

Trump Xi

Global stocks slumped Wednesday after the US and China threatened to impose hundreds of billions of dollars worth of tariffs on each other, escalating a trade war between the two largest economies. The dollar and Treasury yields rose. 

Here is the scoreboard:

Dow Jones industrial average: 24,701.19 −218.47 (-0.88%)

S&P 500: 2,777.32 −16.52 (-0.59%)

  1. President Donald Trump threatened to slap tariffs on $200 billion worth of Chinese goods. The move prompted China to promise retaliatory tariffs on the US, and comes days after the two countries imposed duties on $34 billion worth of products each. 
  2. Trump clashed with other NATO leaders at a summit in Brussels. He ranted at members who don't dedicate the agreed-upon 2% of gross domestic product on defense spending, later demanding that spending target be doubled. He also called Germany a "captive of Russia." 
  3. Producer prices in the US jumped last month to a peak not seen since 2011. The producer price index rose 0.3% in June, the Labor Department said, lifted by accelerating costs of services and vehicles. 
  4. Canada's central bank hiked its key rate by 25 basis points to 1.5%. The increase, which was widely expected, came amid a comeback in the housing market and solid jobs growth. Still, the central bank noted growing trade tensions with the US in a statement. 

And a look at the upcoming economic calendar:

  • The European Central Bank releases meeting minutes.
  • Consumer price index data are out in the US.
  • China reports trade numbers.

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