Wall Street close: US benchmarks slammed on tariff/currency wars and poor US data

US benchmarks for the start of the month were slammed making for the worst single-day performance in over a month following weakness in the US manufacturing data sector shown through the latest economic data. At the same time, angst over global trade relations has been weighing on investor sentiment.

The Dow Jones Industrial Average, DJIA, lost 263 points, or 0.9% to around 27,787 while the S&P 500 index ended roughly 27 points lower, or 0.9% to 3,114. The Nasdaq Composite index fell back 97 points, or 1.1%, to close around 8,567. 

US data misses the mark

In data, and in stark contrast to that seen from China over the weekend in yesterday's Asian session, the Institute for Supply Management's purchasing managers index for the US manufacturing sector came in at 48.1% for November, below forecasts of a 49.2% reading but by only a negligible 0.1% compared to the prior reading. "Nonetheless, it was the fourth consecutive month below 50, " analysts at ANZ Bank noted. 

On the trade front, there were a number of conflicting headlines, but Commerce Secretary Wilbur Ross said that President Trump is prepared to levy more duties on Chinese goods if a deal is not reached, with 15% tariffs on $160 billion in imports scheduled to take effect as soon as December 15th. 

Currency wars in full effect

Coupled with announcements that President Donald Trump will restore tariffs on steel and aluminium imports from Brazil and Argentina, risk appetite was waning in the US sessions – Trump justified the move saying those countries' weak currencies had made it harder for US food exports to compete.

"Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers," Mr Trump said.

In a tweet after the market closed, he claimed:

"US manufacturers are being held back by the strong dollar, which is being propped up by the ridiculous policies of the Federal Reserve - Which has called interest rates and quantitative tightening wrong from the first days of Jay Powell!" 

DJIA levels