(Reuters) - U.S. stocks fell on Wednesday and looked set to snap their four-day winning streak after Washington’s threat to impose tariffs on an additional $200 billion worth of Chinese goods raised fears of an escalating trade war.
China responded to Trump’s threats by accusing the United States of bullying and warned that it would hit back.
The biggest drags on the Dow Jones Industrial Average were Boeing, 3M, Caterpillar and Chevron. Their shares were down between 1.7 percent and 2.9 percent.
The materials index dropped 1.95 percent, the most among the major S&P sectors, led by a 4.7 percent drop in Freeport-McMoRan, as copper prices hit their lowest in about a year.
“These companies have the most going on with China tariffs, so they would be the ones that get hurt the most,” said Mark Esposito, chief executive officer of Esposito Securities in Dallas.
Investors are also looking forward to the earnings season, where S&P 500 companies are expected to post second-quarter profit growth of around 21 percent, according to Thomson Reuters data.
However, Morgan Stanley told clients that the earnings season could trigger risk aversion among investors if companies start warning of slower growth due to trade tariffs.
At 13:06 EDT the Dow Jones Industrial Average was down 203.69 points, or 0.82 percent, at 24,715.97, the S&P 500 was down 18.43 points, or 0.66 percent, at 2,775.41 and the Nasdaq Composite was down 41.22 points, or 0.53 percent, at 7,717.98.
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