US markets tumble amid trade tension

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US markets fell on Tuesday over the fear of an impending trade war between the world’s largest economies after Donald Trump’s latest threat to China.

The Dow Jones Industrial Average fell 287.26 points, or 1.15 percent, to 24,700.21, wiped out gains for the year with a six-day losing streak, the longest since March 2017.

The S&P 500 decreased 11.18 points, or 0.40 percent, to 2,762.57. The Nasdaq Composite Index fell 21.44 points, or 0.28 percent, to 7,725.59.

The Dow's triple-digit losses were mainly led by the decline of Boeing and Caterpillar. The shares of Boeing and Caterpillar dropped 3.84 percent and 3.62 percent, respectively, at market closing. The two stocks are sensitive to trade tensions since they have a large portion of overseas business.

Meanwhile, shares of US chipmakers Nvidia and Qualcomm fell 1.86 percent and 0.84 percent, respectively.

Futures also reacted instantly to the escalating trade tension. Chicago Board of Trade (CBOT) futures settled significantly lower on Tuesday with soybeans falling to a two-year low amid escalating trade tensions.

The most active soybean contract for July delivery fell 19.5 cents, or 2.15 percent, to settle at 8.89 US dollars per bushel. July corn went down 2.25 cents, or 0.63 percent, to close at 3.5375 US dollars per bushel. July wheat was down 12.25 cents, or 2.50 percent, to settle at 4.7775 US dollars per bushel.

CBOT brokers reported that funds sold 12,000 contracts of soybeans, 7,000 contracts of wheat and 17,000 contracts of corn on Tuesday.

During the Tuesday morning session, CBOT soybeans once lost more than 5 percent, but saw some recovery later. Still, the price at close reached the lowest level since March, 2016.

After unveiling plans to impose additional tariffs on Chinese goods worth around 50 billion US dollars, the White House went further by threatening to identify 200 billion US dollars worth of Chinese products for additional tariffs.

China is a major buyer of US soybeans. A spokesperson of China's Ministry of Commerce said Tuesday that if the US loses its rationality and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back.

AgResource, an agricultural advisory and research firm based in Chicago, estimates that in the past two weeks, US farmers have lost more than 100 US dollars per acre in revenue as a result of the fall in crop prices.

Trump’s obsession with tariff has caused concerns over the negative influence on US economy.

“Certainly it’s true some jobs get lost but history shows more jobs are created when you trade,” said Michael Bloomberg, former Mayor of New York.

“Hope fully he (Trump) will change his mind,” Bloomberg said, noting the current path is not a good one.

The Chinese stock market also fell but the influence on citizens’ lives is not as big as in the US since the US pension program is tied to the stock market, Ha Jiming, a senior researcher of think tank China Finance 40 Forum, said, noting the US should be cautious when adopting tariffs.

(With inputs from Xinhua)