U.S. stocks opened lower Thursday as Wall Street braced for an escalation in the trade conflict between the U.S. and China, with both sides making tariff threats against one another, even as were set to resume late Thursday afternoon.
China threatened to retaliate against the U.S. if President Trump goes ahead with his plan for a sharp increase in tariffs against the world’s second-largest economy.
Beijing’s threat responds to Trump’s decision, announced over the weekend, to slap an additional 25 percent tariff on $325 billion worth of Chinese goods, which the administration says will kick in Friday at 12:01 a.m. ET.
China’s Commerce Ministry said on its website Thursday that the “Chinese side deeply regrets that if the U.S. tariff measures are implemented, China will have to take necessary countermeasures,” according to Reuters.
The Wall Street Journal. reported that Beijing took comments this week by Trump and Vice President Mike Pence that the Fed should cut interest rates as a sign the White House is worried about the U.S. economy and, thus, ready to make concessions.
Mei Xinyu, an analyst at a think tank affiliated with China’s Commerce Ministry, said, “Why would you be constantly asking the Fed to lower rates if your economy is not turning weak,” according to the Journal.
|I:DJI||DOW JONES AVERAGES||25655.57||-311.76||-1.20%|
|I:COMP||NASDAQ COMPOSITE INDEX||7827.389852||-115.93||-1.46%|
The trade tensions have been weighing on markets. The S&P 500 and Nasdaq are already on track for their worst week of 2019, specifically, since the week ending Dec. 21 when they tumbled more than 7 percent.
The Dow Jones Industrial Average is looking at its largest weekly since March 8. However, if the Dow falls more than 49 points on Thursday, the blue-chip index will also suffer its worst week since Dec. 21, 2019.
The S&P 500 and Nasdaq are on track for a fourth day of losses, which would be the longest losing streak in two months, since five days of losses ending March 8.
Chevron shares rose after it declined Thursday to make a counter offer for Anadarko Petroleum, the big Permian basin producer that said it would accept an Occidental Petroleum offer, which it deemed superior to Chevron’s bid.
|OXY||OCCIDENTAL PETROLEUM CORPORATION||56.72||-3.49||-5.80%|
|APC||ANADARKO PETROLEUM CORP.||73.64||-2.22||-2.93%|
Crude oil prices declined to $61.38 per barrel.
The yield on the 10-year Treasury slipped to 2.44 percent.
China’s Shanghai Composite closed down 1.48 percent, the Hang Seng was off 2.39 percent and Japan’s Nikkei 225 declined 0.93 percent.
Britain’s FTSE 100 was down 0.39 percent, France’s CAC 40 fell 1.32 percent and Germany’s DAX retreated 0.95 percent.