The intensifying trade squabble between President Trump and China is making for uniquely bad May trading for U.S. stocks, which continue to tumble after the S&P 500 suffered its worst week of 2019.

The Dow Jones Industrial Average ended down by 618 points, or 2.38 percent, marking the biggest one-day loss for the blue-chip index since January.

At the closing bell, the S&P 500 had dipped 2.4 percent.

Both are on track for their worst start to the month through May 13 since 1970, according to Dow Jones Market Data.

The Nasdaq Composite Index COMP, -3.41% off 5.5%, was set for its sharpest early May drop since 2000.

All three benchmarks are looking at their worst monthly losses since December.

The dramatic trading session saw companies with the greatest exposure to China — such as Dow stalwarts Boeing and Caterpillar — take the largest hits.

The tech sector also took a beating, with Apple, United Technologies and Cisco all down around 5 percent.

The escalation in trade tensions between the U.S. and China wiped more than $1 trillion from global markets in just one day.

Stock exchanges across the world have witnessed intense volatility over the past few weeks, with all three major indices in the U.S. seeing an extended sell-off as investors parsed the likelihood of a resolution to months of trade negotiations between the world’s two largest economies.

Talks in Washington ended Friday without an agreement after the U.S. raised tariffs on $200 billion of Chinese imports to 25% from 10%.

While Trump has repeatedly asserted that China pays the tariffs, White House economic adviser Larry Kudlow acknowledged this weekend that U.S. consumers end up paying for the administration’s tariffs on Chinese goods, telling “Fox News Sunday” in an interview that “Both sides will suffer on this.”

Trump said today he was not worried about additional retaliation from China for the tariffs the U.S. had imposed on a total of $250 billion in Chinese imports, saying “It’s working out very well.”

He also said he was hopeful for a “very fruitful” meeting with China’s President Xi Jinping at the G-20 meeting in Osaka in June.

The retaliation from the Chinese finance ministry comes after Trump followed through on his threat to raise tariffs on $200 billion of Chinese imports last week.

As of 12:01 a.m. last Friday, around 5,700 categories of Chinese-made goods bound for the U.S. were subject to a 25 percent tariff, up from 10 percent.

The decline in trade relations has left businesses, investors and policymakers across the world concerned about the negative impacts on an already slowing global economy.

 

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