- Trump says he has great respect for Chinese President Xi Jinping, but the U.S. deficit was too big. "We can't do that anymore," Trump says.
- The comments, along with a slide in tech shares, led the Dow to its first decline in five days. The S&P 500 also snapped a five-day winning streak.
Stocks closed lower on Monday after President Donald Trump said an announcement on U.S.-China trade will be coming after the close. Steep losses in some of the biggest tech shares also pressured the broader market.
Trump said he has great respect for Chinese President Xi Jinping, but the U.S. deficit was too big. "We can't do that anymore," Trump said.
The comments come after director of the National Economic Council Larry Kudlow told CNBC's Becky Quick that Trump has "not been satisfied" with the trade talks with Beijing. "The president has suggested tariffs on a couple $100 billion" in Chinese goods, Kudlow said. "He has not been satisfied with the talks with China on this. My guess is that an announcement will be coming soon."
The Dow Jones Industrial Average fell 92.55 points to 26,062.12 as Apple and Boeing lagged, snapping a four-day winning streak. The Nasdaq Composite dropped 1.4 percent to close at 7,895.79 — notching its worst day since July 27 — as shares of Amazon, Apple and Micron fell. The pulled back 0.6 percent to 2,888.80, ending a five-day winning streak, with tech and consumer discretionary underperforming.
Apple shares fell 2.6 percent amid fears it could be caught in the middle of a U.S.-China trade war. China is one of Apple's biggest markets. The tech giant said earlier this month that tariffs on Chinese goods could hurt its business.
Trump is looking to announce new tariffs on around $200 billion worth of Chinese imports as soon as Monday. Trump has also said he is "ready to go" with tariffs on another $267 billion in Chinese goods.
"The rift within the Trump administration on the appropriate approach to negotiations with China seems to be re-emerging," said Ed Mills, policy analyst at Raymond James. "Trade hardliners within the administration (Navarro/Lighthizer) have advocated for a more forceful approach and Trump appears to have once again sided with the hardliners, setting up continued escalation between the U.S. and China."
On Monday, Trump tweeted that tariffs have "put the U.S. in a very strong bargaining position," adding: "If countries will not make fair deals with us, they will be 'Tariffed!'"
China's foreign ministry, meanwhile, stated China would retaliate in kind to the U.S. if it initiates fresh tariffs. This comes just days after news emerged that the U.S. was seeking to reignite trade discussions with China.
"If the imposition of those tariffs results in the cancellation of trade talks and Chinese restrictions on ex-ports, that's a market negative as it increases trade tensions," said Tom Essaye, founder of The Sevens Report, in a note.
"One potential scenario is the U.S. announces the tariffs, but delays their implementation until after the talks. If that occurs, then the situation shouldn't become a near term headwind. Regardless, it appears this trade drama between the U.S. and China is coming to a head in the coming weeks," Essaye said.
Boeing shares fell 1.1 percent. The company is considered a bellwether for global trade given its exposure to overseas markets.
Technology stocks also contributed to the drop in the major indexes Monday.
Twitter dropped 4.2 percent after MoffettNathanson reiterated its sell rating on the stock, noting cost growth should accelerate moving forward. The stock is now down about 40 percent from its 52-week high.
Micron's stock dropped 1.6 percent after analysts at BMO Capital Markets and Deutsche Bank slashed their price targets on the stock, citing weaker pricing for memory chips.
Amazon, meanwhile, declined 3.2 percent after an analyst at Citi suggested the company split into two to avoid antitrust scrutiny from the Trump administration. The stock also posted its worst day since April 24, when it dropped 3.8 percent.
"Apple and some of the chipmakers are down because of fears they may get hit with tariffs," said Kim Forrest, senior portfolio manager at Fort Pitt Capital. Forrest also noted that "some of the leadership may be a bit long in the tooth. If you bet these names will go up in perpetuity, ... I'm going to bet against you."
— CNBC's Thomas Franck contributed reporting.