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The Dow Jones Industrial Average fell over 370 points in pre-market trading after U.S. President Donald Trump threatened to impose an additional $200 billion in tariffs on Chinese goods. On Monday night, the president announced that if China "refuses to change its practices," the United States would have no choice but to aggressively retaliate through trade policy.
China's Commerce Ministry responded that the latest threat is a violation of recent terms agreed to by the two nations. "The United States has initiated a trade war that violates market laws and is not in accordance with current global development trends," the Commerce Ministry said this morning.
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
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Here's a closer look at today's most important market events, our Money Morning insight into today's volatility, and the top stocks to watch.
Bloomberg Reports: "Trouble Is Brewing."
According to Bloomberg's latest report, America could be heading for an economic disaster that would rival the Great Recession.
Billionaire Ray Dalio's hedge fund, Bridgewater Associates, has made a $22 billion bet against the market.
And Citibank calls our present situation "eerily reminiscent of the mortgage crisis."
To see why we believe some of the richest players in the world are preparing for a market collapse, click here.
The Top Stock Market Stories for Tuesday
- In other trade news, the U.S. Senate is seeking to impose sanctions on Chinese mobile giant ZTE Corp. The push defies President Trump's recent concession to China aimed to reduce tensions and avoid a trade war. However, the Senate just passed the National Defense Authorization Act, a military funding bill that includes a provision to reinstate sanctions on ZTE.
- There is trouble at the kingdom of Tesla Inc. (Nasdaq: TSLA) The company's CEO, Elon Musk, sent an e-mail to employees this week that claims an unnamed worker took part in "extensive and damaging sabotage" at one of its facilities. The CEO and his firm is trying to determine whether the employee had been influenced by an outside organizations.
Money Morning Insight for Tuesday's Volatile Markets
Last month, Congress caved to the big banks on Wall Street and let them go right back to the risky, speculative gambles they were making when they collapsed the economy in 2008. And it could lead to the next financial crisis.
According to Money Morning Capital Wave Strategist Shah Gilani, we shouldn't be surprised. Here's what you need to know to stay out ahead of the next major crash.
Three Stocks to Watch Today: ORCL, FDX, GME
- Oracle Corp. (NYSE: ORCL) will lead a slim roster of earnings reports on Tuesday. Wall Street anticipates that the cloud computing giant will report earnings per share (EPS) of $0.94 on top of $11.20 billion in revenue.
- FedEx Corp. (NYSE: FDX) will report earnings after the bell. Wall Street anticipates that the shipping giant will report EPS of $5.71 on top of $17.19 billion in revenue. But forget the earnings report. As we noted this week, a major standoff is about to push FDX stock through the roof. Learn more about this huge profit potential.
- Shares of GameStop Corp. (NYSE: GME) will look to continue their momentum thanks to buyout interest. Multiple media outlets report that private equity companies are exploring potential deals that would take the video game retailer private in the near future. Shares of the Texas-based firm gained nearly 9% yesterday. According to Reuters, Sycamore Partners is one of the firms interested in a potential takeover.
- Look for an additional earnings report from La-Z-Boy Inc. (NYSE: LZB). The average analyst projection calls for EPS of $0.64 on top of $426.75 million in revenue.