By Sruthi Shankar
(Reuters) - U.S. aerospace companies, automakers, grain merchants and chipmakers were the early casualties on Wednesday after China and the United States announced tariffs on $50 billion of imports, cementing fears they were spiraling towards a trade war.
The speed with which the trade spat between Washington and Beijing is ratcheting up - the Chinese government took less than 11 hours to respond with its own measures - led to a sharp sell-off in global stock markets and commodities.
At 6:22 a.m. ET, Dow e-minis were down 568 points, S&P 500 e-minis fell 48 points and Nasdaq 100 e-minis dropped 148.25 points.
The stock futures implied the S&P 500 would not only open below its 200-day moving average, a key support level, but also challenge its 2018 low from Feb. 9.
The blue-chip Dow Jones Industrial Average and the tech-heavy Nasdaq Composite would come close to their 200-day marks.
China levied 25 percent additional tariffs on U.S. goods, but unlike Washington's list that covers many obscure industrial items, Beijing's covers 106 key U.S. imports including soybeans, planes, cars, whiskey and chemicals.
As has been the case since the trade war fears surfaced, industrials were the worst hit.
Shares of Boeing, whose older 737 narrowbody jet would likely be covered by China's list, tumbled about 6 percent in premarket trading. Caterpillar fell 4.5 percent.
Automakers Ford, General Motors and Fiat Chrysler fell between 3.5 percent and 4 percent. Tesla was down 4.7 percent, following a near 6 percent gain on Tuesday after saying it need not raise more capital as its Model 3 output increases.
Grain merchant Archer Daniels was down 3.3 percent, while Bunge slipped 2.7 percent.
The malaise was broad based. Twenty-four of the 30 Dow components were trading premarket, with all of them in the red. About 185 of the S&P 500 components were trading premarket, with only nine of them flat to slightly higher.
Among them was Lennar, which gained 2.2 percent after the homebuilder reported a higher quarterly profit as it sold more homes at higher prices.
Investors headed for safer bets, sending gold prices nearly 1 percent higher. U.S. 10-year Treasury yield was last down 2.5 basis points at 2.76 percent.
Economic data due includes the ADP National Employment Report that is expected to show U.S. private employers added 205,000 jobs in March, compared to 235,000 jobs in February. That comes ahead of the more comprehensive March payrolls data on Friday.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
RECOMMENDED FOR YOU