Shares in U.S. steel stocks fell on Friday as investors worried about escalating global trade tensions after President Donald Trump announced hefty tariffs on China.
Industrial and materials indexes also ended down, though above their session lows, after the Trump administration said early on Friday it was placing a 25 percent tariff on $50 billion of goods from China related to intellectual property and technology, and pledged to impose further levies if China retaliates.
Within minutes, China said it planned to retaliate and announced 25 percent tariffs on U.S. goods worth $50 billion.
The Trump administration had previously announced tariffs on imported steel and aluminium coming from several countries.
Canada and Mexico have said they will retaliate for the Washington-imposed metals tariffs.
The S&P 1500 Steel index <.spcomsteel> fell 2.8 percent, while U.S. Steel Corp
"The (steel company) earnings have been strong as a result of the tariffs the administration put in place already. Investors are worried that with the trade war escalating today it`s better to sell ... and take profits," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
If U.S. industrial sales to China are curtailed, investors worry this would indirectly hurt demand for steel and other materials used in products, such as agricultural machinery, O`Rourke said.
Shares of aluminium supplier Alcoa
The S&P 500 materials index <.splrcm> closed down 0.6 percent, while the industrials index <.splrci> fell 0.3 percent.
"Industrial stocks are being hurt by the trade sanctions announced by the U.S., and compounding it is the stronger dollar," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Strength in the dollar often hurts companies selling goods overseas as it makes their prices less competitive.
The dollar index <.dxy>, which measures the greenback against a basket of other major currencies, was flat but still on track for a 2.9 percent increase for the year to date.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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