It looked like it was going to be another good day for Wall Street, which has done remarkably well for most of 2019. But a tweet from President Donald Trump seemed to affect markets in detrimental ways.
At 1:25 P.M. Eastern Time, the Dow Jones Industrial Average was at 27,126.39 points. The Nasdaq was at 8,293.64 points. All seemed well…that is, until 1:26 P.M., when Trump sent a series of four tweets, which included complaints about Chinese leadership, the failure to negotiate a trade deal with Beijing, and the possibility of more tariffs against that country if a trade deadline of September 1 wasn’t met.
Trump pointed out that so far, nothing had come about from trade talks. He lamented what happened earlier this year during trade talks.
“We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to buy agricultural product from the U.S. in large quantities, but did not do so,” Trump added. “Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!”
…buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and…
— Donald J. Trump (@realDonaldTrump) August 1, 2019
Trump also made direct threats to China, telling them that, unless a trade deal was made, they could expect a tariff increase on goods coming into the United States.
“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” Trump tweeted. “This does not include the 250 Billion Dollars already Tariffed at 25%.”
…We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!
— Donald J. Trump (@realDonaldTrump) August 1, 2019
After those tweets were issued out, the markets plunged significantly, without a rebound being made by the end of the trading day. The Dow fell by 542.97 points from the position it had been in before Trump’s tweets to the closing bell, while Nasdaq plummeted by 182.52 points during that time.