The S&P 500 index dropped 3.2% on October 29th, 2019, as the United States and China continue to trade tariffs.
The U.S. stock market fell by more than 3% on October 29th, 2019, following a decision by President Donald Trump to postpone his tariff increase against China until December 15th. The decision was made in an attempt to give the two countries more time to negotiate a trade deal before the higher tariffs are implemented. While investors welcomed the delay in new tariffs, they remained wary of a potential trade war between the two countries.
U.S. stock futures fall after Trump postpones China tariffs
What is a tariff?
A tariff is a tax placed on goods coming into or leaving a country in order to protect domestic industries from foreign competition and encourage consumers to buy local products instead of imported ones.
Why is the Stock Market down today?
Stock Market Today: Uptrend continues; S&P 500 hits record high
On October 29th, 2019, the S&P 500 dropped 3%, while both Dow Jones Industrial Average and Nasdaq Composite fell by 2%. This comes after weeks of volatility that saw stock markets hit record highs and then plummet due to fears of a global economic slowdown due to the ongoing trade war between the United States and China.
In August 2018, President Donald Trump announced that he would impose 10% tariffs on $200 billion worth of Chinese goods coming into America starting September 1st.
In response, China retaliated with $60 billion worth of new tariffs against American goods.
This resulted in both countries imposing higher taxes on each other’s imports until it became clear that neither side was willing or able to back down.
On September 24th, 2018 – just days before planned implementation – President Trump announced that he would delay these new tariffs for three months in order for further negotiations with China.
After this three month period expired without any agreement being reached between both sides (in fact there were no formal negotiations), President Trump announced that he would be increasing these new tariffs from 10% up to 25% on January 1st 2019.
