The trade news was overshadowing the annual Federal Reserve symposium in Jackson Hole, at which Fed Chairman Jerome Powell will give a highly anticipated speech at 10 am ET.
Stock futures, which were initially up, dropped on the reports of Chinese tariffs. All three major indexes opened in the red. The Dow (INDU) traded more than 100 points, or 0.4%, lower, while the S&P 500 (SPX) and the Nasdaq Composite (COMP) are down 0.5% and 0.6%, respectively.
The Chinese tariffs will impact $75 billion worth of US goods and range from 5% to 10%, and will also include oil. On top of that, China will resume its 25% tariffs on US car imports. The move was the latest escalation in the ongoing US-China trade war.
US oil prices fell in response, dropping 2.6% to $53.96 a barrel.
The US dollar, measured by the ICE U.S. Dollar Index, was up 0.1%. The yield on the 10-year US Treasury bond was slightly lower at 1.6029%.
The market's volatility gauge, the CBOE Volatility Index, or Vix, was up nearly 8%, and CNN's Fear and Greed index indicated 'fear'.
Prior to the tariff news, St. Louis Fed President James Bullard talked monetary policy as the day in Jackson Hole is getting under way. Bullard spoke out in favor of interest rate cuts on CNBC given the recent inversion of the Treasury yield curve.
The inversion, meaning shorter-dated bonds yield more than longer-dated bonds, has been a historic recession indicator.
Investors are eying Powell's speech for details regarding the Fed's future policy path. Expectations for a quarter percentage point rate cut in September are at nearly 100%.
In the minutes from last month's central bank meeting, released Wednesday, the July rate cut was described a mid-cycle adjustment rather than the beginning of an easing cycle.
https://www.cnn.com/2019/08/23/investing/dow-stock-market-today/index.html
2019-08-23 14:27:00Z
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