Dow Slips, But Doesn't Tumble, On Trade War Fears

US markets have closed firmly lower following the Washington's announcement of tariffs against metals from key allies, though escaping a bloodbath.

The Dow Jones finished down 1.0 percent or 250 points at 24,415. The S&P 500 lost 0.7 percent to 2,705, while the Nasdaq slipped 0.3 percent to 7,442.

Stocks were under pressure the entire session following an announcement from Commerce Secretary Wilbur Ross that the US would impose stiff tariffs on aluminium and steel imports from the EU, Canada and Mexico.

Losses deepened later in the session, particularly when Canadian Prime Minister Justin Trudeau announced retaliatory duties on American imports worth US$12.8 billion. Mexico also announced retaliatory duties, and the EU is expected to follow suit.

Companies heavily leveraged to international trade, including Caterpillar and Boeing were among the biggest losers in the Dow, shedding 2.3 percent and 1.7 percent, respectively.

Yet the market's overall losses, while not insignificant, were also well below those suffered on the worst trading days earlier this spring.

"Yes there are some pretty ominous headlines, but the market is taking it pretty well," said Jack Ablin of Cresset Wealth Advisors. "There is somewhat of a credibility issue with this administration just because they continuously change their tack all the time. Investors believe that most of it is posturing and is not policy." (AFP)