Dow sinks 400 points as trade tensions surge

Stocks fell early Monday amid concerns over U.S. trade wars, with the Dow Jones industrial average down more than 400 points, a drop of 1.75 percent.

The S&P 500 experienced a similar percentage loss, down more than 50 points, or 1.87 percent. By day’s end, both recovered a bit of ground, with the Dow closing down 328 points and the S&P 500 down 38 points.

The stock tumble followed reports in The Wall Street Journal and Bloomberg that President Trump is planning to stop some Chinese companies from investing in American technology.

The Journal reported that the Treasury Department is preparing new rules to stop companies with significant Chinese ownership from buying U.S. companies with “industrially significant technology.”

Treasury Secretary Steven Mnuchin called the report “fake news,” but seemed to confirm that new restrictions are being prepared for “all countries that are trying to steal our technology.”

On behalf of @realDonaldTrump, the stories on investment restrictions in Bloomberg & WSJ are false, fake news. The leaker either doesn’t exist or know the subject very well. Statement will be out not specific to China, but to all countries that are trying to steal our technology.

— Steven Mnuchin (@stevenmnuchin1) June 25, 2018

{mosads}President Trump also kept trade tensions high over the weekend, threatening to continue imposing tariffs on countries that do not lower their own trade barriers to U.S. goods.

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” he wrote in a tweet.

Thus far, the strategy of pressuring countries to lower trade barriers by imposing U.S. restrictions has backfired. China, Canada, the European Union, Mexico and Turkey have all imposed new tariffs in response to Trump’s tariffs.

The latest plunge in the markets continues a six-month trend of volatility, characterized by sharp increases and decreases to stock prices. The markets have wiped out all or most of the gains they made in 2018.

Updated at 4:40 p.m.