Shares of some chipmakers, retailers, Apple and Wynn Resorts tumbled Monday on fears that the U.S.-China trade war is escalating.
President Donald Trump announced last week the U.S. would levy tariffs of 10% on the remaining $300 billion in Chinese imports that had eluded duties. Trump accused China of "currency manipulation" by letting its currency weaken, crossing the 7 yuan per dollar threshold and of reneging on a promise to resume imports of U.S. agricultural products.
The lack of clarity in trade negotiations weighed on chipmakers Nvidia (down 6.45%), AMD (down 4.93%) and Micron (off 4.85%) because Chinese technology company Huawei is a big customer of U.S.-made chips.
American chip stocks continue to suffer after China's Huawei was put on a blacklist that restricted American firms from selling products to the company because of national security concerns. These stocks count on the business from Huawei, which uses the chips for smartphones and laptops.
Shares of Apple, which relies on a large portion of sales coming from China, were 5.23% lower. Even though Apple has said it has moved some production out of China, tariffs can lead to major price increases for the iPhone and other products.
Department store Kohl's is also hurting, down 1.45%, because the new round of tariffs scheduled to begin Sept. 1 would impact apparel, footwear and toy products far more than the previous rounds. Analysts say retailers, specifically department stores, are poorly positioned to compete in the trade war environment with already low margins.
Share of casino operator Wynn Reports was down 7.18%. Wynn is particularly vulnerable to a trade war because the company relies heavily on the business of its casinos on the Macau peninsula in China. A contraction in business in Macau would weigh on Wynn's margins.
Dow Jones Industrial Average fell 767 points on Monday.