Wall Street plunges as yuan drops

Credit: Reuters Studio
Published on August 5, 2019 - Duration: 01:12s

Wall Street plunges as yuan drops

Wall Street's major indexes tumbled on Monday with the S&P 500 dropping about 3%.

As Fred Katayama reports, as a fall in the yuan following U.S. President Donald Trump's vow to impose additional tariffs on Chinese goods sparked fears of a further escalation of the U.S.-China trade war.

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Wall Street plunges as yuan drops

A surprise move by China slammed stocks on Wall Street Monday, extending last week's steep sell-off.

The Dow lost nearly 770 points.

All three indexes suffered their worst one-day percentage declines since December.

The sell-off came after China suddenly let its currency slide sharply against the dollar in response to the latest U.S. tariff threat.

President Donald Trump slammed Beijing's move as a "major violation." The intensifying trade war drove investors to seek safety in gold and government bonds, pushing down the benchmark Treasury yield to a three-year low.

That sent bank stocks south - Bank of America, JPMorgan Chase, and Citigroup among them.

Bruderman Asset Management chief market strategist Oliver Pursche: SOUNDBITE: BRUDERMAN ASSET MANAGEMENT CHIEF MARKET STRATEGIST OLIVER PURSCHE (ENGLISH) SAYING: "A month ago or tow weeks ago, market were pricing in a trade war, an end of a trade war in a deal by late summer, early fall.

I think it's recalibrating now and it's basically saying OK, that' not going to happen in 2019.

And it may not happen until 2020." Shares of tech companies that are highly exposed to China were the biggest losers, including Apple and chipmakers Intel and Nvidia.

Macy's, Kohl's, Gap and other retailers that source much of their apparel from China also got hit hard.

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