US stocks tumble as US-China trade tension intensifies

Major US equity indices opened sharply lower on Tuesday and were being weighed down heavily by intensifying US-China trade tensions.

The US President Donald Trump, late Monday, asked his administration to identify $200 billion worth of Chinese goods that will be subject to additional tariffs of 10%. Trump also threatened to find $200 billion more worth of goods if China tried to retaliate against those additional tariffs.

Adding yet another layer to trade tensions, the Senate passed legislation on Monday to reinstate a ban on sales of US components to ZTE Group, despite efforts by Trump to spare the Chinese telecommunications company.

This marked the latest development in escalating trade tensions between the world’s two largest economies and unsettled investors across global financial markets. The blue-chip Dow Jones Industrial Average (DJIA) declined for the sixth consecutive session, its longest losing streak since March 2017 and has now erased all of its YTD gains.  

At the time of writing this report, the DJIA was down around 300-points to 24,675 and the broader S&P 500 Index lost nearly 20-points to 2,754. Meanwhile, tech-heavy Nasdaq Composite Index declined over 50-points and slipped back below the 7,700 round figure mark.