Stocks Tumble After Trump Orders Tariffs on $50B Worth of Chinese Goods

U.S. stocks tumbled the most in six weeks and Treasuries rallied as investors shifted focus from the Federal Reserve to the threat of an escalating trade war with China that has the potential to disrupt global growth.

The benchmark S&P 500 Index slumped the most since early February and the Dow Jones Industrial Average lost more than 500 points after President Donald Trump ordered tariffs on about $50 billion in Chinese goods. The 10-year Treasury yield slid toward 2.8 percent and gold advanced with the yen as investors sought safe havens. The dollar rebounded.

“This morning markets were likely to be down because Facebook and other tech companies having difficulty and the tariff announcement just basically held buyers back, nobody wanted to step in front of the announcement just in case,” said Jamie Cox, a managing partner for Harris Financial Group in Richmond, Virginia.

The threat that a tit-for-tat trade spat with China will erupt and hamper global growth has investors on edge a day after the Fed sought to reassure markets that it’s in no hurry to raise rates even as it lifted growth projections for the world’s largest economy. Trump’s first trade action directly aimed at China would come as policy makers including IMF Managing Director Christine Lagarde warn of a global trade conflict that could undermine the broadest world recovery in years.