Stocks closed broadly lower Tuesday after President Donald Trump indicated he was in no hurry to make a trade deal with China.
Stocks of technology companies, which do a lot of business with China, led the declines. Intel lost 2.8%.
Speaking in London, where he is attending a NATO summit, Trump said he had “no deadline’’ to end the 16-month trade war between the world’s two largest economies.
“In some ways I like the idea of waiting until after the election,” Trump added.
Investors were also disappointed that the U.S. proposed tariffs on French goods, a day after announcing taxes on steel and aluminum imports from Chile and Argentina. France’s reaction was swift and robust, with President Emmanuel Macron and his finance minister warning of a European riposte if the U.S. measure is implemented.
The S&P 500 fell 0.6%. The Dow Jones Industrial Average dropped 280 points, or 1%, after being down nearly 400 points earlier in the day. The Nasdaq lost 0.6%.
Stocks began sinking right after Trump’s latest rhetoric shot at the Chinese leadership. His remarks could amount to either a short-term negotiating gambit or a sign of his willingness to run for reelection without a breakthrough in the trade war.
Trump dismissed the tumult on Wall Street, choosing instead to highlight how much stock prices have risen since the start of the year.
“We have picked up record numbers in our stock markets, so that’s OK. That’s the way I feel.” Trump said.
“I have to make the right deal. I’m not going to make a deal that’s not going to be great for our country. It can’t be an even deal. If it’s an even deal, it’s no good.”
The trade negotiations with China, the president declared, are at a “critical stage.”
“But if the stock market goes up and down, I don’t watch the stock market, I watch jobs,” Trump said, contradicting the numerous tweets he has sent out when stock markets have set new highs.
Tensions between the two nations flared anew last week after Trump signed legislation expressing U.S. support for pro-democracy demonstrators in Hong Kong.
On Dec. 15, additional U.S. tariffs are set to kick in on many Chinese-made items, including smartphones and toys. The Trump administration is already taxing more than $360 billion worth of Chinese imports. China has counterpunched by taxing $120 billion in U.S. imports.
Pressure is building on both sides to complete what Trump has called a limited “phase 1” deal before the deadline. Still, Trump could end up postponing the tariffs, as he did in October, to allow more time for negotiations.