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Apr 2, 2018

CNBC | Stocks open lower after China Slaps new Tariffs on US goods on April 2, 2018.

cnbc.com

Stocks open lower after China slaps new tariffs on US goods

Fred Imbert, Matt Clinch

Stocks opened lower on Monday, the first trading day of the month, as concerns of a trade war brewing between the U.S. and China persisted.
The Dow Jones industrial average fell 65 points at the open, with Walmart as the biggest decliner in the index. The S&P 500 pulled back 0.4 percent, with consumer discretionary as the worst-performing sector. The Nasdaq composite dropped 0.6 percent.
China announced overnight Monday it had implemented tariffs on 128 types of U.S. imports. The goods hit with the charges the list of products proposed by Beijing in March and comes as a direct response to President Donald Trump signing off on tariffs on imported steel and aluminum last month. China said in March that those goods had an import value of $3 billion in 2017.
Trade worries also remained after Trump linked his proposal to build a border wall between the U.S. and Mexico to ongoing NAFTA negotiations between the two countries. In a tweet Sunday, Trump said: "They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!"
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"The new bearish narrative is that tariffs implemented by the Trump administration will spur a global trade war that would spiral the world into a recession," said Nick Raich, CEO of The Earnings Scout. "We understand the fear. We get how bad a global trade war would be on future profits."
However, "despite fears of a global trade war, guidance among the early reporting companies are taking earnings growth expectations higher," said Raich, noting companies are getting a substantial boost from lower corporate taxes.
Traders work on the floor of the New York Stock Exchange on Mar. 23, 2018 in New York City. Spencer Platt | Getty Images
Traders work on the floor of the New York Stock Exchange on Mar. 23, 2018 in New York City.
Also weighing on investor sentiment Monday was a decline in Amazon. The e-commerce giant's stock fell more than 1 percent after Trump tweeted on Saturday that Amazon was scamming the U.S. Postal Service, adding the service loses "billions of dollars" delivering packages for the e-commerce giant.
Amazon has been one of the best-performing stocks over the past year, rising nearly 64 percent in that time period.
Tech shares continued to be under pressure on Monday, with shares of Facebook, Netflix and Alphabet all trading lower. Last month, concerns over how Facebook handles data collected from its users sent the entire sector lower. Facebook dropped 10.4 percent in March.
Elsewhere in corporate news, Humana shares jumped 6 percent following reports that Walmart was interested in acquiring the health insurer.
Though discussions remain in early stages, sources confirmed to CNBC that Walmart is interested in strengthening its existing relationship with Humana amid a rush of deal speculation in the industry.
In economic news, a March manufacturing PMI is due to be released at 9:45 a.m. ET, while a March ISM manufacturing index and a February construction spending index are both set to be released at 10 a.m. ET.
—CNBC's Cheang Ming contributed to this article.