Remember when Trump took all the credit for a rising stock market? Well, he has to take the blame when it goes down, and he REALLY DOES have to take the blame this time.
As of 3:15 pm, the Dow has dropped close to 700 points. Why?
Trade war fears and a presidential attack on Amazon are rocking Wall Street.
The Dow dropped more than 700 points on Monday, and the Nasdaq plunged 3%. The S&P 500 hit its low for the year and was on track for its lowest close since November. The sell-off left all three major indexes in the red for 2018.
The sell-off on the first day of the second quarter came after President Trump once again attacked Amazon on Twitter. Amazon (AMZN), one of the biggest drivers of the 2017 market rally, tumbled 5%, wiping out more than $37 billion of its market value.
Trump once again accused Amazon of taking advantage of the US Postal Service, and he suggested that Amazon does not pay its fair share of tax.
In fact, Amazon pays the same lower rate that the post office charges other bulk shippers, and it collects sales tax in every state that charges it. Amazon does not collect sales tax on purchases made from third-party vendors.
“You’ve got the president of the United States attacking a single company over what he considers to be unfair practices,” said Ian Winer, head of equities at Wedbush Securities.
Amazon wasn’t the only tech stock in trouble. Tesla( Bloomberg News report that Apple plans to switch to its own chips. Almost every stock in the Nasdaq 100 lost ground.), Netflix ( ) and Cisco ( ) all dropped by at least 4%. Intel ( ) plunged 8% on a
The Nasdaq has plunged more than 10% from its all-time high on March 12.
And again, it’s not Trump slamming Amazon. It’s also blowback from his trade war with China.
Wall Street is also fretting about rising trade tensions, especially with China. Beijing responded to Trump’s steel and aluminum tariffs on Monday by following through on its threat to impose tariffs on $3 billion of US imports. The tariffs apply to 128 products, ranging from pork and meat to steep pipes.
Trump plans to place additional tariffs on about $50 billion worth of Chinese goods — and Beijing has promised to respond.
Trump, with the usual braggadocio, said he doesn’t worry about trade wars because he thinks he can win them. Still, it’s not sure HOW he can win them and Wall Street knows it.
No matter the cause, signs of fear abounded. The VIX (CNNMoney’s Fear & Greed Index of market sentiment dropped further into “extreme fear.” Crude oil plunged about 3%. Gold, which tends to do well when investors are worried, climbed more than 1%.) volatility index jumped more than 15%.
“None of it makes a lot of sense,” said Michael Block, chief strategist at Rhino Trading Partners. “I don’t know what we learned that was new. Chinese tariffs are not surprising.”
I mean, you can see how Trump, merely by Tweeting, has lost hundreds of millions of dollars:
But a few steelworkers have jobs now, so….