The S&P 500 and the Dow Industrials reversed course to trade lower on Friday, while the Nasdaq gave up nearly all gains after President Donald Trump said fresh tariffs are ready to go on $267 billion worth of Chinese imports.
Trump’s latest salvo in the trade dispute comes as the world awaits his decision on imposing levies on $200 billion worth of the Asian nation’s goods.
The United States and Japan have begun trade discussions, Trump said, adding Tokyo “knows it’s a big deal” if an agreement cannot be reached.
“Trump comments are one of those wild cards that spring out of the blue and take down the markets,” said Gary Bradshaw, portfolio manager with Hodges Funds in Dallas, Texas.
Eight of the 11 major S&P sectors were lower. The industrial index fell 0.65 percent, with shares of trade-sensitive companies Boeing and Caterpillar down 1.6 per cent and 0.9 per cent, respectively. The S&P materials index fell 0.84 percent.
Earlier, White House economic adviser Larry Kudlow said Trump will not make any decisions on tariffs on $200 billion worth of Chinese goods before officials evaluated public comments.
U.S. stocks have had a bit of a roller-coaster on Friday, dipping at the open after strong August jobs data led to rate-hike jitters, before Kudlow’s comments brought a measure of relief.
The Dow Jones Industrial Average was down 133.83 points, or 0.51 per cent, at 25,862.04, the S&P 500 was down 6.09 points, or 0.21 per cent, at 2,871.96 and the Nasdaq Composite was up 2.26 points, or 0.03 per cent, at 7,924.98.
The defensive real estate index fell 1.11 per cent, the most among sectors, while utilities followed with a 0.93 percent drop.
The technology index, which was leading the markets higher earlier, reversed course to drop 0.04 percent. The Philadelphia SE Semiconductor index also gave up gains to trade flat.
Chipmaker Broadcom held on to its gains and was last up 6.7 per cent after a strong current-quarter revenue forecast.
Marvell Technology though gave up most of its gains and was last up 0.3 per cent. The chipmaker raised its forecast for synergies around the Cavium acquisition that analysts said removed risks around further growth.
Tesla slid 6.4 per cent following the latest top management exits and on mounting investor concerns about Chief Executive Elon Musk’s behavior after he smoked marijuana on a live webcast.
Canada’s main stock index fell on Friday after domestic data showed a surprise decline in jobs in August and as trade and tariff worries continued to weigh.
At 1:14 p.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 89.64 points, or 0.56 per cent, at 16,011.30.
TSX has closed lower in the past five sessions in a row and is set for biggest weekly decline in 24 weeks at current level.
Canadian economy unexpectedly shed 51,600 jobs in August after two months of gains, lifting the unemployment rate to 6 percent. Reuters poll of analysts had predicted a gain of 5,000 jobs and unemployment rate to rise to 5.9 percent.
On the trade front, U.S. and Canadian negotiators pushed ahead in grinding talks to rescue the NAFTA, but a few stubborn issues stood in the way of a deal.
Investors were also bracing themselves for a fresh salvo of Sino-U.S. tariffs as public comment period for proposed U.S. tariffs on an additional $200 billion worth of Chinese imports ended at midnight on Thursday.
Ten of the index’s 11 major sectors fell, led by the energy sector’s 1.6-per-cent dip alongside a slide in oil prices.
Reuters