The stock market took a dive after President Donald Trump’s tough talk on trade with China, dragging down media and tech shares along with many other sectors.
The Dow Jones Industrial Average fell 799.36 points, or 3%. It is now just above the 25,000-point milestone. The damage was worse on a percentage basis for the Nasdaq (down almost 4%) and the S&P (down more than 3%).
Tech giants Apple, Amazon, Netflix and Alphabet dropped between 4% and 6%, with damage to traditional media companies overall a bit less severe. Fox and Discovery fell 1%, Disney was off 2%, AT&T surrendered 3%, and CBS, Comcast and Viacom retreated 4%.
The only entertainment or tech stocks to move fractionally positive were exhibitors AMC and Cinemark.
On Monday, stocks staged a broad rally as optimism increased as Trump and Xi Jinping, China’s leader, took a break from their mud-slinging over trade. At the Group of 20 summit in Argentina, there were peaceful signs. Today, though, Trump returned to a much firmer stance, christening himself “Tariff Man” and tagging one tweet with his aim to “make America rich again.”
Financially, some other factors entered investors’ thinking, chief among them interest rates. The 10-year Treasury rate hit a three-month low of 2.9% and now that benchmark metric for government debt has the tightest spread since 2007 with the two-year Treasury note.
In between jabs at Xi, Trump has been aiming barbs at the Federal Reserve, blaming it for raising interest rates, which is intended to curb inflation but also makes it more expensive for companies and consumers to borrow money.