Global stock indexes are falling Wednesday after the Trump administration released a list of $200 billion in goods that could be hit with tariffs and China said it would retaliate. Energy and industrial companies and basic materials makers are taking some of the worst losses.
KEEPING SCORE: The S&P 500 index lost 18 points, or 0.7 percent, to 2,775 as of 12:15 p.m. Eastern time. The Dow Jones Industrial Average dropped 185 points, or 0.7 percent, to 24,734. The Nasdaq composite fell 48 points, or 0.6 percent, to 7,711. The Russell 2000, an index of smaller and more U.S.-focused companies, gave up 8 points, or 0.5 percent, to 1,687.
The S&P 500 had risen for four days in a row and it closed at a five-month high Tuesday.
TARIFF THREATS: The Trump administration proposed a 10 percent tax on imported items including vacuum cleaners, furniture and car and bicycle parts, but not U.S.-branded smartphones and laptops. It is scheduled to make a decision on the potential tariffs after Aug. 31.
China’s government said it will take “firm and forceful measures” if the new tariffs are enacted. Chipmakers, which make large portions of their sales in China, took some of the worst losses. Nvidia fell 2.3 percent to $247.50 and Micron Technology lost 3.2 percent to $53.94.
Among industrials, Caterpillar lost 2.7 percent to $137.45 and farm equipment maker Deere lost 1.7 percent to $142.13.
WHAT NEXT? On Friday the U.S. and China put 25 percent taxes on $34 billion in imports and President Donald Trump has said nearly all imports from China, more than $500 billion in goods, could be taxed. China imported only $130 billion in goods from the U.S. last year but could retaliate through other means including regulatory moves and investigations of U.S. companies.
Indexes in Europe and Asia took steeper losses as investors worried the worsening trade dispute will hamper the growth of the global economy.
The trade dispute stems from Washington’s complaint that Beijing steals or pressures companies to hand over technology and concerns that plans for state-led development of Chinese champions in robots and other fields might erode American industrial leadership.
ENERGY: Oil prices fell after Libya said it will start exporting oil again. Benchmark U.S. crude fell 2.4 percent to $72.36 a barrel in New York. Brent crude, used to price international oils, lost 3.4 percent to $76.21 a barrel in London.
Chevron sagged 2.7 percent to $124.10 and ConocoPhillips fell 1.8 percent to $70.47.
OVERSEAS: France’s CAC 40 and the DAX in Germany both lost 1.5 percent. Britain’s FTSE 100 index dropped 1.3 percent.
Japan’s benchmark Nikkei 225 fell 1.2 percent and the South Korean Kospi lost 0.6 percent while Hong Kong’s Hang Seng shed 1.3 percent.
GROUNDED: Airlines took sharp losses after American said it expects slower fare growth in the U.S. American Airlines slumped 6.4 percent to $36.63 and United Continental slid 3.4 percent to $68.87.
PRICES RISING: The Labor Department said wholesale prices kept rising in June. Excluding food and gas prices, which can be volatile, the department’s index of producer prices has risen 2.8 percent over the last year. That’s the fastest pace in six years and a sign inflation is picking up after years of weakness.
Investors have worried that the Federal Reserve will raise interest rates more quickly as inflation increases. The Fed wants inflation to stay at around 2 percent, but it suggested recently that it won’t act too quickly if inflation goes above the 2 percent mark.
REACH FOR THE SKY: Twenty-First Century Fox raised its offer for European pay TV service Sky. Fox already owns 39 percent of Sky and wants to buy the rest, but rival Comcast has stepped in with its own bid. Fox says the new offer values Sky at $32.5 billion.
Fox lost 3.8 percent to $47.90. In the U.K., Sky stock fell 0.5 percent.
BONDS: Bond prices ticked higher. The yield on the 10-year Treasury note fell to 2.85 percent from 2.87 percent.
The dip in bond yields helped utility companies make small gains. Utility companies tend to pay large dividends, so investors who want income often buy them when bond yields fall. Real estate investment trusts, which also pay large dividends, fell less than the rest of the market.
CURRENCIES: The dollar edged up to 111.57 yen from 111.28 yen. The euro edged fell to $1.1722 from $1.1745.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay