Stocks fell Wednesday after China announced new tariffs on 106 more U.S. products, increasing trade war worries.
The Dow was down more than 100 points, with Boeing and Caterpillar leading the index lower. The S&P 500 fell 0.3 percent, with industrials and tech as the worst-performing sectors. The Nasdaq was little changed.
At its session lows, the Dow fell more than 500 points, while the S&P 500 and Nasdaq sank by as much as 1.6 percent and 1.9 percent, respectively.
“I think the market is just concerned about this thing escalating right now,” James Paulsen, chief investment strategist at The Leuthold Group, told CNBC’s “Squawk Box.” “It’s not so bad if we have a few tariffs on a few products, but if it escalates worldwide, … then you’re really threatening the recovery globally.”
China’s Ministry of Commerce said the tariffs are designed to target up to $50 billion in U.S. products annually and would hit goods like soybeans and cars.
The move comes less than a day after President Donald Trump issued a list of Chinese imports that the U.S. administration aims to target as part of a crackdown on what the president sees as unfair trade practices.
Automakers were down, with Ford and General Motors slipping. Boeing also pulled back, falling more than 3.5 percent. Caterpillar declined 2.8 percent, while United Technologies — another Dow component — fell 1.7 percent.
Perceived safe-haven assets got a bid higher on Wednesday. Gold futures rose 0.6 percent to $1,344.80 per ounce while the 10-year U.S. Treasury yield fell to around 2.76 percent. Bond yields move inversely to prices.
Trump tweeted later in the morning: “We are not in a trade war with China, that war was lost many years ago.”
Wednesday’s moves come a day after the major indexes closed sharply higher as tech rebounded from steep losses seen in Monday’s sessions.
In economic news, the ADP National Employment Report showed private companies added 241,000 jobs in March, more than the expected gain of 205,000.
The services purchasing managers’ index (PMI) slipped to 54.0 in March from 55.9 in February. Meanwhile the non-manufacturing ISM index came in at 58.8 for last month, missing expectations.
CNBC’s Sam Meredith contributed to this report.
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