Friday's early trade: Wall Street heads lower on rising China trade tensions

US stocks fell on Friday after the United States announced tariffs on $50 billion worth of Chinese goods, spurring a promise of immediate and equivalent retaliation from Beijing. President Donald Trump said in a statement that a 25 percent tariff would be imposed on an initial list of strategically important imports from China from July 6 and vowed further measures if Beijing struck back.
In response, China's Commerce Ministry said it planned to impose tariff measures of similar size and intensity. Beijing has published its own list that target $50 billion in US goods, including soybeans, aircraft, and autos and chemicals. Boeing, the single largest US exporter to China, fell 1.7 percent, dragging the Dow lower for the fourth day in a row.
Construction equipment maker Caterpillar slipped 1.6 percent and agricultural trader Bunge dropped 3 percent. Global financial markets have struggled since February in the face of signs Washington and Beijing were headed toward a trade war after several rounds of negotiations failed to resolve US complaints over Chinese industrial policy, market access and a $375 billion trade gap. "It has gotten investors nervous," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "It's going to probably mean a cautious and bumpy ride for the stock markets."
Investors are also weighing the impact of tightening monetary policy by central banks on the equities market. The US Federal Reserve increased its key interest rate for the second time this year on Wednesday and hinted at the possibility of two more hikes by the end of 2018. The European Central Bank weighed in on Thursday to say it would end its bond-purchase program at year-end, even if any interest rate hike was still distant.
At 9:51 a.m. ET the Dow Jones Industrial Average was down 140.43 points, or 0.56 percent, at 25,034.88, the S&P 500 was down 10.06 points, or 0.36 percent, at 2,772.43 and the Nasdaq Composite was down 38.09 points, or 0.49 percent, at 7,722.95. NXP Semiconductors rose 3.1 percent after a media report that Beijing had already approved Qualcomm Inc's proposed $44 billion acquisition of the chipmaker. Qualcomm was up 0.6 percent. Adobe shares dropped 3.2 percent, the biggest percentage decliner on the S&P 500, after the company projected third-quarter revenue that fell slightly below estimates.