Major equity indexes in the U.S. opened the day deep in the negative territory on Monday with China’s announcement of tariff hikes on $60 billion worth of U.S. imports triggered a wave of flight-to-safety. While the CBOE Volatility Index, Wall Street’s fear gauge, is up nearly 27% on the day, the Dow Jones Industrial Average and the S&P 500 are both losing 1.7% and the Nasdaq Composite is erasing 2.1%.
Disregarding U.S. President Trump’s warnings, China’s finance ministry today announced that it decided to hike import tariffs ranging from 5% to 25% on 5,140 U.S. products worth about $60 billion effective June 1st.
Among the 11 major S&P 500 sectors, the risk-sensitive Technology Index is losing 2.5% on the day while the falling Treasury bond yields weigh on the Financials Index, forcing it to drop more than 2%. There won’t be any macroeconomic data releases on Friday and headlines surrounding the U.S.-China trade dispute is likely to continue to drive the market action.
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