Stocks plummet as Trump's trade war with China escalates

The Dow Jones Industrial Average plunged 617 points on Monday, falling more than 2 percent amid fears that President Trump's escalating trade war with China will damage the U.S. economy.

Markets fell on the news that China would move to retaliate against higher tariffs on Chinese goods imposed Friday by Trump, fueling concerns that Washington and Beijing are moving further away from a deal that would end the trade fight.

Trump has repeatedly downplayed the economic pain from the tariffs, but the retaliatory measures by China and falling stocks served as a reminder that both sides are likely to take a hit from a war involving the world’s two largest economies.

China’s retaliation rattled U.S. stock markets, which have adjusted to previous ups and downs in the tumultuous negotiations. The Dow on Monday sank 2.4 percent to 25,324 points, a level it first cleared in January 2018. 

The S&P 500 also fell 2.4 percent, while the tech-heavy Nasdaq composite plunged 3.4 percent.