Stocks fall as Trump escalates trade war with China

President Donald Trump welcomes Chinese President Xi Jinping at Mar-a-Lago state in Palm Beach, Florida.

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President Donald Trump welcomes Chinese President Xi Jinping at Mar-a-Lago state in Palm Beach, Florida.
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Reuters/Carlos Barria

Global stocks slumped Wednesday after the US and China threatened to impose hundreds of billions of dollars worth of tariffs on each other, escalating a trade war between the two largest economies. The dollar and Treasury yields rose.

Here is the scoreboard:

Dow Jones industrial average: 24,701.19 −218.47 (-0.88%)

S&P 500: 2,777.32 −16.52 (-0.59%)

  1. President Donald Trump threatened to slap tariffs on $200 billion worth of Chinese goods. The move prompted China to promise retaliatory tariffs on the US, and comes days after the two countries imposed duties on $34 billion worth of products each.
  2. Trump clashed with other NATO leaders at a summit in Brussels. He ranted at members who don’t dedicate the agreed-upon 2% of gross domestic product on defense spending, later demanding that spending target be doubled. He also called Germany a “captive of Russia.”
  3. Producer prices in the US jumped last month to a peak not seen since 2011. The producer price index rose 0.3% in June, the Labor Department said, lifted by accelerating costs of services and vehicles.
  4. Canada’s central bank hiked its key rate by 25 basis points to 1.5%. The increase, which was widely expected, came amid a comeback in the housing market and solid jobs growth. Still, the central bank noted growing trade tensions with the US in a statement.

And a look at the upcoming economic calendar:

  • The European Central Bank releases meeting minutes.
  • Consumer price index data are out in the US.
  • China reports trade numbers.