Dow falls 400 points on global trade, political concerns

Stocks slide amid US-China trade uncertainty

Kaltbaum Capital Management President Gary Kaltbaum and former Dallas Fed advisor Danielle DiMartino Booth discuss how the Federal Reserve and the stock market is reacting to the U.S.-China trade war.
The Dow Jones Industrial Average Opens a New Window. was down 400 points midsession Thursday, U.S. Treasury yields fell to their lowest level since 2017 and crude oil prices saw their lowest prices since March, as investors began to adjust to the reality of a longer term standoff between the U.S. and China over trade policy.

Stocks in industries seen as most vulnerable to supply chain disruptions, resulting from tariffs and the U.S. ban on trade with some Chinese techology companies, were hit hargest including semiconductors, automobiles and energy companies.

The potential resignation of U.K Prime Minister, Theresa May, over Brexit issues and the prospect of anti-EU populist parties doing well in Thursday EU elections also unnerved investors globally.

Weak U.S. economic data also contributed to negative sentiment. A reading of IHS Markit’s manufacturing purchasing managers survey for May fell to a nine year low in April and and new home sales fell to an annual pace of 673,000 in April.

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