Dip on Wall Street amid fears over tariffs and trade tensions

US stocks sank again as investors worried about tariffs and rising trade tensions.

That hurt industrial companies, while banks slumped along with interest rates.

Stocks rose in the morning as investors looked for a rebound from the previous day's losses, but with European leaders warning about the risks of trade disputes, indexes gradually headed lower.

Boeing and other industrial companies, including airlines and defence companies, took some of the worst losses.

Stocks have bounced around since President Donald Trump announced his tariff plans at the start of this month.

They slumped at first, but came back after the administration said it would grant exemptions to some countries.

President Donald Trump waves a greeting to the group of well-wishers at St Louis, Missouri (J.B. Forbes/AP)
President Donald Trump waves a greeting to the group of well-wishers at St Louis, Missouri (J.B. Forbes/AP)

They have slipped over the last two days as investors considered the possibility of greater trade tensions with Europe and China.

"Since the correction, investors have been a little bit more sensitive to risk," said Karyn Cavanaugh, senior market strategist at Voya Investment Strategies.

"Before the correction, investors were almost bulletproof."

Elsewhere, banks fell along with bond yields.

Declining yields force interest rates on loans like mortgages lower, which hurts bank's profits.

Household goods companies also fell while department stores and other retailers lost ground after the Commerce Department said retail sales declined in February.

The S&P 500 index lost 15.83 points, or 0.6%, to 2,749.48.

The Dow Jones industrial average lost 248.91 points, or 1%, to 24,758.12.

The Dow is comprised of 30 large multinational companies, some of which will feel a pinch from higher metals costs or from retaliatory tariffs that may be placed on US-made goods.

The Nasdaq composite fell 14.20 points, or 0.2%, to 7,496.81.

The Russell 2000 index of smaller-company stocks declined 7.74 points, or 0.5%, to 1,584.31.

European Union head Donald Tusk urged Mr Trump to pursue more cooperation with Europe instead of putting tariffs on European goods.

The EU wants an exemption from the tariffs on aluminium and steel imports that Mr Trump recently announced and has said it could retaliate with tariffs of its own.

Germany's Chancellor Angela Merkel said she cannot predict if those talks will succeed.

Aerospace and defence giant Boeing slid 8.41 dollars, or 2.5%, to 330.26 dollars.

Arconic, which uses a lot of aluminium in making products for aerospace companies, lost 89 cents, or 3.6%, to 24.06 dollars.

Defence contractors including Raytheon also declined, as did airlines.

Ms Cavanaugh said a trade war is unlikely because the Trump administration is unlikely to take steps that seriously harm global trade.

While investors have sold industrial stocks, she said it was possible some of them will benefit from changes to Nafta or other trade agreements.

"You have to be careful when you're trying to Washington-proof your portfolio because you don't know what's going to happen," she said.

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