US main indexes fell sharply as Trump threatens China

Wall Street’s main indexes fell on Friday after President Donald Trump threatened to slap new tariffs on China over the coronavirus crisis, while a profit warning from Amazon added to the gloom.

Trump said late on Thursday his trade deal with China was now of secondary importance to the pandemic, as his administration crafted retaliatory measures over the outbreak.

Dow Jones Industrial Average was down 449.62 points, or 1.85%, at 23,896.10, the S&P 500 was down 59.05 points, or 2.03%, at 2,853.38 and the Nasdaq Composite was down 179.27 points, or 2.02%, at 8,710.28.

The S&P 500 technology sector shed 1.5% in early trading, while the trade-sensitive Philadelphia Semiconductor index fell 4%.

The consumer discretionary subindex also came under pressure after Amazon.com Inc said it could post its first quarterly loss in five years as it was spending at least $4 billion in response to the coronavirus pandemic. The e-commerce giant’s shares tumbled 6.3%.

The energy sector fell 4.7% as big oil firms Exxon Mobil and Chevron Corp reported weak quarterly results, feeling the pain inflicted by crashing oil prices.

With nearly half of the S&P 500 companies having reported results so far, analysts expect a 14.4% fall in profits for the first quarter and foresee an even sharper decline of nearly 37% for the current quarter.

However, aggressive stimulus measures and hopes of reopening the economy from virus-induced curbs helped the S&P 500 index post its best month in 33 years in April. The benchmark index is now 18% away from reclaiming a record high hit in February.