Dow Jones futures reversed slightly higher Tuesday morning, along with S&P 500 futures and Nasdaq futures. President Donald Trump imposed tariffs on $200 billion worth of Chinese goods, in a big escalation of the China trade war. In Monday's session, the Nasdaq composite sold off sharply, while the S&P 500 index and Dow Jones fell more modestly. The FANG stocks of Facebook (FB), Amazon.com (AMZN), Netflix (NFLX) and Google parent Alphabet (GOOGL) were all notable losers Monday, but were slightly higher Tuesday morning, aside from Facebook. Chinese-listed stocks and the Shanghai composite also gained Tuesday.
XDow Jones Futures Today
Dow Jones futures initially retreated on the Trump tariffs announcement, but were up 0.2% vs. fair value. S&P 500 futures advanced nearly 0.2%. Nasdaq 100 futures climbed a fraction. Remember that extended trading in Dow Jones futures, Apple stock and more often doesn't always translate into regular-session trading.
During Monday's stock market trading, the Nasdaq composite fell 1.4%, approaching its 50-day moving average. The S&P 500 index lost 0.6% and the Dow Jones 0.4%. Keep in mind that stocks had rallied last week on hopes for China trade talks, not new Trump tariffs.
Investors may have already already priced in the impact of new Trump tariffs, even with the prospect of higher and additional duties.
Trump Tariffs Escalate China Trade War
Trump tariffs hit an additional $200 billion in Chinese imports, as expected. They'll start on Sept. 24 with a 10% rate but rise to 25% by year-end. The U.S. set a 25% tariff on an initial $50 billion of Chinese goods.
Beijing has vowed to retaliate with tariffs on $60 billion in U.S. goods, after matching dollar-for-dollar on the first $50 billion. China also reportedly is mulling nontariff moves to hurt U.S. businesses with China exposure.
Trump said he'll impose tariffs on a further $267 billion worth of Chinese goods if Beijing retaliates. That would mean Trump tariffs on essentially all Chinese imports.
Apple, FANG Stocks Tumble Monday
Apple stock slid 2.7% on Monday, even with reports that the new Trump tariffs would spare the Apple Watch and some other products. A member of the Dow Jones, S&P 500 index and Nasdaq composite, Apple stock also fell on indications that Apple iPhone XS preorders were below initial iPhone X preorders last year.
Facebook stock fell just 1.1%, but hit its worst level since April 25. The relative strength line, which tracks a stock's performance vs. the S&P 500 index, has fallen to its worst level since the start of 2017.
Amazon stock skidded 3.2%, but found some support at its 50-day line intraday.
Netflix stock retreated 3.9%, undercutting its 50-day moving average.
Google stock retreated 1.5% to its lowest level in more than two months. Google's RS line is the lowest since the end of May.
Apple, Amazon, Netflix and Google stock all edged higher Tuesday morning. Those were just a small portion of Monday's losses.
Facebook stock fell 1% early Tuesday as JPMorgan Chase cut its price target to 195 from 205.
China Stocks Rebound
Alibaba (BABA) fell 3.55% on Monday, near 52-week lows. Recent e-commerce IPO Pinduouo (PDD), which broke out Thursday then fell back Friday, retreated 7.5% on Monday.
Alibaba and Pinduouo stock were up Tuesday.
The Shanghai composite on Monday finished at its worst close since November 2014. But it rebounded 1.8% Tuesday after trading little changed in morning trading.
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