President Trump is pushing both China and Iran to the brink, betting they’ll capitulate and warning of dire consequences if they don’t.
Why it matters: The stock market is already taking a beating as China retaliates to Trump’s tariff hikes on $200 billion in Chinese goods, and analysts are warning of a possible global recession if he follows through with his threat to extend them to all Chinese imports. Meanwhile, Trump’s warnings that Iran will "suffer greatly" if “they do anything” to provoke the U.S., paired with bellicose statements from senior officials, are deepening fears of another war in the Middle East.
Stocks on Monday had their worst day since January. The Dow Jones Industrial Average fell 618 points, while the S&P 500 dropped 2.4% and the Nasdaq closed down 3.4%.
Why it matters: The stock market has largely ignored potential threats of a U.S.-China trade deal falling through. That changed today when China announced it would retaliate against U.S. actions by raising tariffs to 25% on $60 billion worth of U.S. imports (effective June 1).
Sen. Tom Cotton (R-Ark.) acknowledged on "CBS This Morning" Monday that U.S. farmers will be hurt by retaliatory tariffs stemming from President Trump's trade war with China, but said that their sacrifice is "pretty minimal" compared to the sacrifices of U.S. soldiers serving overseas.
The trade war is on, with China today pledging to levy retaliatory tariffs on $60 billion in U.S. goods. Dan and Axios Markets editor Dion Rabouin dig into what's happening now and what happens next.
Sycamore Partners offered to buy women’s apparel retailer Chico’s FAS for $408 million, or $3.50 per share.
Why it matters: The price isn't just 5.4% lower than where Chico's stock closed on Thursday or 12% lower than where it closed on Friday. It's 18.6% less than the $4.30 per share offer that Chico's already rejected from Sycamore. Looks like someone's been eyeing the clearance rack.
Central bank guidance is increasingly falling on deaf ears in the market as more investors position for looser monetary policy no matter what policymakers say. And as the year has progressed, central banks all over the world have moved towards those dovish expectations.
Why it matters: The idea behind forward guidance is it allows central banks to influence market expectations without taking action. But the market has lost faith in the forward guidance of the Fed, European Central Bank, Bank of Japan and central banks from Mexico to Sweden.
China will impose retaliatory tariffs on $60 billion in U.S. goods on June 1, per CNBC, causing the U.S. stock market to fall considerably upon market open today.
Why it matters: The increase from 10% to 25% from Beijing means that the trade war between the U.S. and China is real. The tariffs largely fire back at U.S. agricultural products like peanuts, sugar, wheat, chicken and turkey, bringing more pain to a sector which has already suffered hard losses.
Despite rape allegations against its CEO, China's second-largest e-commerce company, JD.com, posted record quarterly earnings Friday with a $1.1 billion profit after a $364.6 million loss last year.
The big picture: The Nasdaq-listed company's stock got a major boost after reporting earnings but investors are starting to worry about its long-term health. As Axios' Erica Pandey reported, the 21% revenue growth posted by Chinese e-commerce giant was its slowest on record, signaling that the rush of new Chinese customers is starting to plateau. JD's chief rival, Alibaba, has also reported slowing growth.
