US open: Stocks drop at the bell as trade war heats up again
US stocks opened sharply lower on Monday, following on from heavy losses seen across Asian indices overnight.
As of 1545 BST, the Dow Jones Industrial Average was 2.21% lower at 25,900.04, while the S&P 500 was 2.27% weaker at 2,865.36 and the Nasdaq Composite started out the session 2.89% softer at 7,772.85.
The Dow opened 584.97 points lower on Monday as in addition to tumultuous Asian trading, US Treasuries were also seeing some big moves, with the yield on the closely watched 10-year note falling to as low as 1.768%.
Investors were also still focussed on tensions between Washington and Beijing, which re-escalated last week when Donald Trump surprised everyone with news that the US would be slapping 10% tariffs on a further $300bn-worth with of Chinese imports on 1 September.
In response, on Monday Beijing instructed its state-owned companies to halt imports of US agricultural products in response to President Trump's fresh tariff proposals on Chinese goods, according to a report from Bloomberg.
Citing people familiar with the situation, the report stated that privately run Chinese crushers that had received tariff waivers on American soybeans from the Chinese government have turned to buying Brazilian soybeans due to continued trade uncertainty, with the waters having been further muddied by fresh economic threats from Washington.
The ongoing uncertainty surrounding trade between the two global superpowers sent the Chinese yuan lower on Monday, with the currency breaking the key psychologically important level of seven yuan-per-dollar, a threshhold which was last breached during the global financial crisis in 2008.
Following the move, Trump said: "China dropped the price of their currency to an almost a historic low. It’s called 'currency manipulation.' Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!"
In the wake of the increased tensions between the US and China, Apple shares slid 4% and Nike dropped 2%, while retail stocks like Etsy and Abercrombie & Fitch all fell at least 4.3%.
Office Depot tumbled 9.3%, while Macy's and Best Buy were retreating by 6% and 5.2%, respectively.
The S&P 500 had recorded its worst five day drop of 2019 during the previous week, shedding 3.1%, while the Dow had its second-worst week year-to-date, dropping by 2.6%.
On the data front, activity in America's services sector slowed last month, contrary to economists' forecasts, amid a slowdown in output, new orders and price gains, although hiring did pick up.
The Institute for Supply Management's services sector Purchasing Managers' Index fell from a reading of 55.1 for June to 53.7 in July. Economists had forecast a reading of 55.5.