NEW YORK – Last week’s topsy-turvy stock market ended on a positive note, but the Dow was set to fall sharply once again Monday after investors got mixed signals on trade.
Larry Kudlow, President Donald Trump’s top economic adviser, said Sunday that US officials expect the Chinese to retaliate for the tariff hike the Trump administration imposed last week. On Friday, the United States increased tariffs on $200 billion of Chinese goods to 25% from 10%.
“We’ll see what they come up with,” Kudlow said of the expected retaliation.
Dow futures were down 270 points Sunday evening, while S&P 500 and Nasdaq futures were down more than 1%.
Wall Street investors fear an escalating trade war in which both the United States and China continue to raise tariffs. US businesses that import Chinese goods pay the tariffs levied by the United States. Companies either eat that cost, which pinches their profits; or they pass the cost onto consumers, which can hurt demand for their products.