By ALEX VEIGA
The Associated Press
Stocks slumped Thursday and bond prices spiked after President Donald Trump surprised markets with a new 10% tariff on $300 billion worth of goods from China beginning next month.
The news erased a broad rally on Wall Street, leading to the market's fourth straight loss. Bond prices surged, sending yields sharply lower, as investors sought safety.
The price of U.S. crude oil skidded nearly 8%, its biggest drop in more than four years and a signal that investors fear the economy could slow down.
Investors were taken off guard by the tariff announcement because the White House had said a day earlier that Beijing had promised to buy more farm goods. That came just as the latest round of trade talks were ending.
Companies that rely heavily on doing business with China took the brunt of the selling Thursday. Electronics retailer Best Buy went from a slight gain to a drop of 10.8% in heavy trading. Apple went from a gain of 1.4% to a loss of 2.2%.
"Investors never like to be taken by surprise, and that's what happened today," said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 index dropped 26.82 points, or 0.9%, to 2,953.56. The index has fallen for four straight days since setting an all-time high on Friday.
The Dow Jones Industrial Average fell 280.85 points, or 1%, to 26,583.42. The average briefly swung about 600 points as the sell-off intensified.
The Nasdaq composite lost 64.30 points, or 0.8%, or 8,111.12. The Russell 2000 index of small companies slid 23.84 points, or 1.5%, to 1,550.76.
The escalation in the long-running and costly trade dispute comes only a couple of days after both sides resumed negotiations. In a series of tweets, Trump noted that while the slow-moving trade talks have been "constructive," China has not followed through on some prior agreements.