President Donald Trump torpedoed an early rally in the stock market today after announcing new China tariffs. The Dow Jones Industrial Average dived more than 1% as it neared a test of its 50-day moving average.
XThe Dow Jones Industrial Average sank 1%, the S&P 500 shed 0.9% and the Nasdaq lost 0.8%. Small caps tracked by the Russell 2000 took the hardest hit, down 1.5%. Volume swelled on the NYSE and Nasdaq vs. Wednesday, according to preliminary data.
The Nasdaq had rallied as much as 1.6%, the Dow Jones index 1.2% and the S&P 500 1.1%, ahead of the tariff news. Trump tweeted tariffs on $300 billion in China goods would start Sept. 1. All three indexes trimmed losses going into the last hour of regular trade to close slightly off session lows.
Goldman Sachs (GS), Caterpillar (CAT), Nike (NKE) and chemicals giant Dow (DOW) tumbled more than 3% apiece. Caterpillar and Nike sliced below their 50-day lines.
Apple (AAPL), which gets some iPhone components from China, reversed to a 2.2% drop in twice normal trade. It had risen as much as 2.3%. Shares slid further below a 215.41 buy point, after briefly clearing the entry on Wednesday.
Also on the Dow Jones, Exxon Mobil (XOM) and Chevron (CVX) skidded about 2% each. West Texas intermediate crude prices plunged more than 7% to $54.24 a barrel. Prices, already lower before the tariff news, dropped sharply amid concerns of a prolonged trade rift. Chevron reports Q2 results Friday before the open.
Oil, Banks, Retail Sell Off
Oil ETFs sold off hard. SPDR S&P Oil & Gas Exploration & Production (XOP) and VanEck Vectors Oil Services (OIH) sank 6% each. Other sector ETFs down hard included SPDR S&P Regional Banking (KRE), SPDR S&P Bank (KBE) and SPDR S&P Retail (XRT), down more than 3% apiece.
Not surprisingly, oil and gas, retail and banks led the downside among IBD's 197 industry groups. Defensive groups including gold miners, medical and utilities bucked the sell-off.
Kirkland Lake Gold (KL) topped the IBD 50 with an 8% jump, rebounding off its 50-day line to recoup most of Wednesday's loss. Gold mining ETFs also bounced back: VanEck Vectors Junior Gold Miners (GDXJ) and VanEck Vectors Gold Miners (GDX) rallied about 5% each.
Also in the IBD 50, Brazilian payments company PagSeguro Digital (PAGS) rose 4% and tech services provider Globant (GLOB) also gained 4%. Enterprise software leaders Atlassian (TEAM) and Upland Software (UPLD), up 3% and 2% respectively, added to their Wednesday gains.
The Innovator IBD 50 ETF (FFTY) was fractionally lower in the stock market today. Innovator IBD ETF Leaders (LDRS), which tracks IBD's ETF Leaders Index, edged 0.1% higher.
Follow Nancy Gondo on Twitter at @IBD_NGondo
YOU MIGHT ALSO LIKE:
After Hours: These Are 5 Big Earnings Movers
Top Dividend Stock Offers Rising Payout That Beats The Market
See The Best Stocks To Buy And Watch
