The Dow traded 300 points lower, while the S&P 500 fell 1.2% as the energy sector lagged. The Nasdaq dropped 1.3%.
Shares of trade bellwethers Caterpillar and Boeing fell more than 1% each. Chipmakers, meanwhile, led the tech sector lower. The VanEck Vectors Semiconductor ETF declined by 1.6% as KLA-Tencor dropped 5.8%. Applied Materials and Lam Research fell more than 2% each
Trump’s tweets initially sent the market reeling on Monday. The Dow fell as much as 471 points while the Nasdaq dropped 2% at one point. However, equities rebounded to close well off their lows as traders bet that a resolution would still be reached.
“I remain hopeful that a deal comes and we won’t see new tariffs on Friday,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “But it’s clear the level of mistrust between the two sides will last for years and some of the tariffs will remain as part of the enforcement tools.”
Chinese Vice Premier Liu He is expected to join a delegation in the United States this week, raising hopes of a trade agreement despite the latest round of duties. However, he will only attend the negotiations on Thursday and Friday. He was originally scheduled to attend negotiations Wednesday through Saturday.
