Wall Street Slips As US-Sino Trade War Fears Grow

Wall Street stocks were put under pressure for the third session in a row on Tuesday, joining a global sell-off on heightened fears that US-China confrontations will mushroom into a trade war.

The Dow Jones dropped 1.2 percent to 24,700.

The S&P 500 shed 0.4 percent to 2,762, while the Nasdaq lost 0.3 percent at 7,725.

Shares of big US companies active in China were among the hardest hit, with Boeing, Caterpillar and Deere each losing almost four percent.

Trade brinkmanship between Washington and Beijing continued late on Monday when President Donald Trump threatened to put fresh duties on between US$200 billion and US$400 billion in Chinese imports, prompting tough words from China.

White House economic aide Peter Navarro told reporters on Tuesday China had "much more to lose" from the clash because of the imbalance in imports.

Despite the escalating rhetoric, many on Wall Street are sceptical a worst-case scenario of an all-out trade war will come to pass.

"Our advice to clients has been to step back from the day-to-day noise," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

"We think that at the end of the day, cool heads will prevail and both sides will reach an agreement."

Among individual companies, Colgate-Palmolive jumped 1.1 percent after announcing a new share repurchase plan of up to US$5 billion.

Sarepta Therapeutics surged 36.8 percent after announcing positive clinical findings on a gene therapy treatment for patients with a form of muscular dystrophy. (AFP)