12:52
Trump signs measure hitting China with $60 billion in annual tariffs

President Trump imposed $60 billion in annual tariffs against Chinese products, following through on his longtime threat. 

 March 22 at 1:34 PM 
Markets plunged Thursday amid fears President Trump’s new tariffs would start a global trade war, with the Dow Jones industrial average closing 724 points down as the Nasdaq Composite and the Standard & Poor’s 500 index also nose-dived.

Markets have been shaky for several weeks since the president announced a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Trump on Thursday announced about $50 billion in annual tariffs on a variety of goods from China. The Chinese are preparing a tit-for-tat response by placing tariffs on U.S. agricultural products such as soybeans that have big markets in China.

Investors are fearful that the trade policies and their fallout could upset a robust global economy and hamper the nine-year bull market.

“Trade tariffs are starting to emerge as a bigger market head wind than originally thought,” said Ivan Feinseth, director of research at Tigress Financial Partners. “The strong U.S. and global economic and fiscal policy tail winds are starting to be overtaken by the proposed tariffs, the Fed’s softer-than-expected economic outlook for 2018 and the fallout from the Facebook issue.”

Traders Peter Tuchman, left, and Patrick Casey work on the floor of the New York Stock Exchange. (Richard Drew/AP file photo)

The bellwether Dow, encompassing 30 large publicly traded companies, plunged nearly 3 percent and is now in negative territory for 2018, closing at 23,957 Thursday. Caterpillar, Boeing, 3M and JP Morgan Chase were among the big drags on the Dow as trade worries deepened.

The broader S&P 500 dropped 2.52 percent Thursday and is now more than 1 percent in negative territory for 2018. The technology-heavy Nasdaq Composite dropped 2.43 percent Thursday but is still up nearly 4 percent on the year.

Investors cautioned that this week’s volatility is not a signal that the nearly decade-long stock boom has come to a close.

“It’s not the end of the bull market,” said Jeff Schulze, Investment Strategist at ClearBridge Investments. “The U.S. economy is still strong. Global growth is accelerating. The earnings picture is still healthy. This is just part of the correction that started in early February. A longer-term investor would be wise to buy the dip.”

The Federal Reserve on Wednesday gave markets more bad news when it announced it would hike a key interest rate, as the central bank continues to move away from the extraordinary efforts it has taken in the past decade to stimulate economic growth. The stimulus moves have greatly boosted stocks since the 2008 financial crisis and ensuing Great Recession.

The Fed also increased its projections for economic growth on Wednesday, bumping them up from previous estimates done before Republicans passed their tax bill. But the projections fall short of the sharp growth Republicans promised the tax cuts would create.

 1:30
Steel tariffs explained using Reddi-wip whipped cream

Trump’s announcement of a 25 percent tariff on steel imports could greatly affect products that you may not know depend on it, like Reddi-wip. 

Tech stocks have contributed to the recent market slide, with Facebook, reeling from a data privacy leak, helping drag the sector down.

The F in the vaunted FAANG stocks — Facebook, Apple, Amazon.com, Netflix, Google — dropped 2.7 percent Thursday, and its losses are bleeding across the technology sector. Apple was down 1.42 percent Thursday, Amazon.com (whose chairman, Jeffrey P. Bezos, owns The Washington Post) was down 2.39 percent, and Google parent Alphabet dove 3.73 percent.

Facebook, with over 2 billion monthly active users, has seen 10  percent of its market capitalization, about $50 billion, vaporized this week on reports that its vast trove of personal data had been misused by Cambridge Analytica, a data mining and political communications firm that was used by the Trump presidential campaign.

Facebook shares have been a key driver of the recent boom in technology, but it and other technology stocks have dropped on fears that regulators could impose rules that hinder their business models.

The social media giant came under heavy fire from lawmakers in the United States and Britain over the weekend after news reports raised questions about whether it allowed third-party developers to access the data of users without their permission — a potential violation of its privacy agreement with the U.S. government.

On Thursday the House Energy and Commerce Committee requested that Facebook co-founder and chief executive Mark Zuckerberg testify at an upcoming hearing in response to the reports that Cambridge Analytica had improperly accessed the names, “likes” and other personal information of about 50 million Facebook users.

Democratic Sens. Edward J. Markey (Mass.) and Amy Klobuchar (Minn.) said this week that they want Zuckerberg to testify to Congress under oath about his company. Zuckerberg told CNN on Wednesday that he would be “happy” to address Congress.

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