Magnifying their previous session’s losses, the US markets ended in red on Thursday after President Donald Trump announced plans to impose additional tariffs Chinese imports to the US, even though the trade talks between the two countries are due to resume September. Trump said the US would impose 10% tariffs on $300 billion of Chinese goods beginning September 1. The president said trade talks with Beijing are continuing after US officials returned from negotiations in China. The 10% levies will apply to $300 billion of Chinese goods coming into the US. It does not include $250 billion of goods already subject to tariffs. Trump accused China of failing to follow through on pledges to buy large quantities of US agricultural products and stop the sale of Fentanyl to the US.
On the economic front, growth in US manufacturing activity unexpectedly showed a continued slowdown in the month of July, according to a report released by the Institute for Supply Management (ISM). The ISM said its purchasing managers index dipped to 51.2 in July after edging down to 51.7 in June. While a reading above 50 still indicates growth in manufacturing activity, street had expected the index to inch up to 52.0. With the continued decrease, the purchasing managers index dropped to its lowest level since hitting 49.6 in August of 2016. Meanwhile, with the more closely watched monthly jobs report looming, the Labor Department released a report showing first-time claims for US unemployment benefits rebounded in the week ended July 27. The report said initial jobless claims climbed to 215,000, an increase of 8,000 from the previous week's revised level of 207,000. Street had expected jobless claims to rise to 214,000 from the 206,000 originally reported for the previous week.
Dow Jones Industrial Average dropped 280.85 points or 1.05 percent to 26583.42, Nasdaq declined 64.30 points or 0.79 percent to 8111.12 and S&P 500 was down by 26.82 points or 0.90 percent to 2953.56.
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