Dow Nightmare Monday Looms on $200 Billion Trump Chinese Tariff Threat
Dow futures is plunging after Trump’s latest threat of imposing tariffs on over $200 billion of Chinese goods. | Source: Brendan Smialowski / AFP
By CCN.com: The Dow Jones has shown strong momentum from May 2 to 3, recording a recovery of nearly 300 points in merely two days. However, U.S. President Donald Trump’s decision to raise tariffs on $200 billion worth of Chinese goods could hinder the performance of the U.S. equities market.
Intensifying Geopolitical Tension Poses Risk on Dow
Throughout the past two months, many strategists were optimistic towards the short-term future of the Dow and the rest of the U.S. equities market due to strong fundamental factors that can sustain the momentum of stocks.
The strong performance of tech stocks like Microsoft and finance stocks such as BlackRock further fueled the confidence of investors in the market as the two key industries led the U.S. economy to engage in a powerful start to 2019.
The Federal Reserve’s decision to maintain the current benchmark interest rate until the year’s end despite signs of economic growth as seen in the rapidly declining unemployment rate served as the primary catalyst for the Dow’s recovery in April.
But, the U.S.-China trade deal always remained an unknown variable that could gear the Dow towards the downside or the upside. With virtually every important fundamental factor laid out for the U.S. equities market to bounce off of, a comprehensive trade deal has been expected to lead to a big rally for the Dow.