Boeing shares sink, dollar dives on Trump's new trade threat
Wall Street stocks dipped early Thursday after fresh trade war rhetoric from President Donald Trump, while Boeing shares tumbled following a brutal Air India crash on a 787 jet.
Just hours after Trump reached a new detente with China on trade tensions, the president threatened to 'send letters out' with an ultimatum to other trading partners.
Meanwhile, Boeing shares shed about five percent after a London-bound 787 Dreamliner crashed in western India, likely killing all 242 people on board.
About 25 minutes into trading, the Dow Jones Industrial Average was down 0.4 percent at 42,705.52.
The broad-based S&P 500 slipped 0.1 percent to 6,018.24, while the tech-rich Nasdaq Composite Index also declined 0.1 percent to 19,595.85.
Data showed that wholesale prices rose 0.1 percent last month, a modest uptick as analysts continue to caution that Trump's tariffs could lift inflation in the coming months.
Among other stocks, Oracle surged 12.1 percent following an upbeat earnings report. The software giant scored eight percent revenue growth in the last year but predicted the coming year would be 'even better.'
The dollar plunged on Thursday after US President Donald Trump threatened higher unilateral tariffs on trade partners, and oil see-sawed as traders evaluated the probability behind reports that Israel could be gearing up to strike Iran.
Stock traded mixed as investors navigated the double whammy of returning trade uncertainty and geopolitical volatility, while Boeing's share price slumped sharply in the wake of a deadly 787 Dreamliner crash in India.
In New York, the broad S&P 500 index reversed early losses to trade slightly up, but the blue-chip Dow struggled in the red.
All European stock markets finished lower, except London, which posted an uptick despite official data showing the UK economy shrank more than expected in April.
The dollar was down against the euro, and at one point fell by more than one percent to its lowest point in three years against the European single currency.
'Trump has done it again. The US president has rattled markets with fresh threats of unilateral tariff rates on several trading partners,' said Fawad Razaqzada, market analyst at FOREX.com.
'Investors are now asking questions... and that's before considering other risks that include valuations, bond market troubles, and a potential military conflict between Iran and Israel,' he said.
Trump on Wednesday said he would be sending letters within the next two weeks to other countries' governments to announce unilateral US levies on their exports to America.
'This is the deal, you can take it or leave it,' Trump told reporters.
The return to trade belligerence eclipsed any optimism that had emerged from a putative agreement between the United States and China on Tuesday to modestly de-escalate trade tensions.
It also left the European Union staring down the barrel of 50-percent tariffs -- at least -- when a pause on them ends on July 9, without any sign so far of Brussels and Washington close to reaching a trade agreement.
The EU has reportedly drawn up plans to slap 100 billion euros ($116 billion) of additional tariffs on US goods if the US levies go ahead.
But 'the indices that seem most exposed to tariffs are China, Mexico, the UK, and those of commodity exporters like South Africa, Saudi Arabia, Australia, and especially Canada,' said Capital Economics analyst Giulia Bellicoso.
Markets were also following reports that Israel was poised to launch airstrikes on Iran -- along with Trump saying he was now 'less confident' that talks with Tehran would end up with it rolling back its nuclear programme.
Oil prices, which had initially jumped on Wednesday on the heightened tensions, flipped direction for much Thursday as investors and analysts weighed reports of imminent Israeli strikes. Towards the end of the trading session they were close to where they ended on Wednesday.
'A solo Israeli strike on Iran's nuclear program without US acknowledgement or support is highly unlikely' and carried a 'considerable' risk of miscalculation, said analysts at Eurasia Group, although they did say the UN nuclear agency's censure 'adds to (the) escalatory environment'.
In the end, the 'threat of an Israeli attack gives the US more leverage during talks,' they surmised.
The next round of US-Iran talks is scheduled for Sunday.
In New York share trading, Boeing dropped more than five percent after a London-bound Air India plane -- a Boeing 787 -- carrying 242 people had crashed in Ahmedabad.
The US planemaker declared itself ready to support Air India following the crash, the first involving a 787 Dreamliner.
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