Dow down 2pc on worries over US tariffs

NEW YORK: US stocks fell sharply at midday Thursday, with the Dow down two percent on worries of a trade war after President Donald Trump said he will slap tariffs on steel and aluminum imports.

Near 1925 GMT, the Dow Jones Industrial Average was down 2.0 percent at 24,530.63.

The broad-based S&P 500 shed 1.7 percent to 2,668.44, while the tech-rich Nasdaq Composite Index fell 1.7 percent to 7,146.80.

Trump's comments on tariffs injected additional uncertainty at a time when investors are already edgy over the prospect of higher interest rates, said Briefing.com analyst Patrick O'Hare.

"Investor sentiment is shaky," said Briefing.com analyst Patrick O'Hare. "It's not a good thing for the market to get into some kind of trade war."

Unusually, the first day of the month attracts new funds, O'Hare said.

"You're not seeing any willingness to buy yesterday's selloff," O'Hare said.

Trump's announcement on tariffs came shortly after a Senate hearing with Federal Reserve chief Jerome Powell at which he said future interest rates would be gradual and allow the economy to expand.

Markets fell Tuesday and Wednesday on worries about Fed policy following Powell's appearance before a House panel on Tuesday.

The biggest losers in the Dow included Boeing, Caterpillar and United Technologies, all down more than three percent. American Express, Apple and Cisco Systems were all down more than two percent.

But United States Steel rose 5.3 percent and Century Aluminum jumped 5.7 percent.