Thread: Dow Jones plunges 1,068 points, Wall Street bloodbath intensifies

Dow Jones suffers worst fall of year as US-China trade war flares


President Xi Jinping and Donald Trump...US President Donald Trump has imposed 10 per cent tariffs on $US300 billion of Chinese imports.

US stocks have tumbled overnight with the Dow Jones suffering its worst drop of 2019 after China retaliated to the latest US trade threat.

Key points:

• The Dow Jones Industrial Average sank 800 points on Monday, its worst drop in 2019
• Technology companies and banks were hardest hit
• The Japanese yen, gold and government bonds rallied as investors turned from risks

The fall was triggered by China letting the yuan tumble beyond the key 7-per-$US1 (7 yuan-per-$1.46) level for the first time in more than a decade.

It is a sign Beijing might be willing to tolerate further currency weakness after US President Donald Trump vowed last week to impose 10 per cent tariffs on the remaining $US300 billion of Chinese imports ($443.6 billion) from September 1.

Technology companies and banks fell the most. Apple and Bank of America each fell 5 per cent.

Bond prices soared, sending yields sharply lower, as investors sought safety.

• The Dow lost 760 points, or 2.9 per cent, to 25,717.
• The S&P 500 fell 87 points, or 2.9 per cent, to 2,844.
• The Nasdaq fell 278 points, or 3.4 per cent, to 7,726.

Safe-haven assets, including the Japanese yen, government bonds and gold, rallied as investors cut back on riskier assets.

"I think there's a sense that President Trump might try and escalate in terms of a reaction, if he thinks that this was a deliberate move by the Chinese to try and weaken their currency artificially," head of G10 FX strategy for the Americas at NatWest Markets Brian Daingerfield said.

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