Wall Street pushes lower at opening on trade worries

• CBOE Volatility Index rises more than 5% on Friday.
• Technology shares suffer heavy losses in early trade.
• Defensive sectors take advantage of sour market sentiment.

Major equity indexes in the United States started the day deep in the negative territory on Friday as investors continue to move away from risky assets amid concerns over a prolonged US-China trade conflict. Reflecting the risk-off mood, the CBOE Volatility Index, Wall Street’s fear gauge, is up more than 5% on the day.  As of writing, the Dow Jones Industrial Average was down 0.7% on the day while the S&P 500 and the Nasdaq Composite were erasing 0.8% and 1.4%, respectively.

Responding to President Trump’s announcement of 10% tariffs on an additional $300 billion worth of Chinese goods, China on Friday said it will not be blackmailed and said that they will retaliate if tariffs are imposed on September 1.  

“If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests,” Chinese Foreign Ministry spokeswoman Hua Chunying said during a press conference, per Reuters. Additionally, White House adviser Larry Kudlow said that they were not concerned by the market reaction to the latest tariff announcement and added that President Trump was not satisfied with the progress in this week’s negotiations in Shanghai.

Among the 11 major S&P 500 sectors, trade-sensitive Technology and Materials are both down around 1.5% to lead the lowers. On the other hand, defensive Real Estate and Utilities both gain 0.5% to confirm the weak risk-appetite.