U.S. stock markets plummeted Monday morning following China’s move to devalue its currency, Beijing’s latest step in a tense face off on trade with President Trump.
The Dow Jones Industrial Average was down 500 points, or 1.9 percent, dipping below 26,000, while the S&P 500 fell 57 points, or 2 percent.
The Dow first broke 26,000 in January of 2018.
China on Monday devalued its currency, the yuan, to its cheapest level in more than a decade, allowing it to sell for more than seven per U.S. dollar.
The move follows President Trump’s announcement last week that he would impose a 10 percent tariff on $300 billion of Chinese imports, adding to the 25 percent tariff in place on a separate $250 billion of China’s goods. Together, the tariffs will cover nearly everything China sells to the United States.
With a devalued currency, China aims to lessen the effects of the tariffs by making its exports cheaper.
Trump in a tweet on Monday labeled China’s move “currency manipulation,” and called on the Federal Reserve to act, which is not the prime objective of the central bank.
“This is a major violation which will greatly weaken China over time!” he said.
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#BREAKING: Dow plummets 500 points after China devalues its currency amid trade war https://t.co/RLqDyRXC8P pic.twitter.com/fTGMLZzPrh
— The Hill (@thehill) August 5, 2019
“This is a major violation which will greatly weaken China over time!” he said.
It’s greatly weakening us peasants in the US, you dip.
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