Wall Street tumbles at the open on economic fears

Traders work on the floor at the New York Stock Exchange (NYSE) on August 5, 2019 at Wall Street in New York City. – Wall Street stocks plunged after a forceful response by Beijing to the latest US tariff announcement escalated an ongoing trade war, exacerbating global growth worries. (Photo by Johannes EISELE / AFP)

NEW YORK, NY (AFP) — US stocks plunged at the open on Wednesday, returning to sell-off mode as investors worldwide fled riskier equities and drove down bond yields on fears the global economy may be weakening even faster than expected.

Amid concerns about impact of the escalating US-China trade war, central banks in India, Thailand and New Zealand cut interest rates overnight. And European powerhouse Germany produced frighteningly weak data on industrial production.

About 25 minutes into the US trading session, the benchmark Dow Jones Industrial Average was down 1.8 percent at 25,552.59 — nearly 500 points — after briefly declining by more than two percent.

The broader S&P 500 slid 1.5 percent to 2,837.32 while the tech-heavy Nasdaq dropped 1.4 percent to 7,727.85.

Trump once again lashed out at the Federal Reserve on Twitter, demanding more economic stimulus as the 2020 presidential elections approach, and accusing the central bank of posing more of a threat than China.

But at the White House he brushed off concerns about Wall Street.

“I would have maybe anticipated even more” market reaction, he told reporters. “Ultimately it will go much higher than it ever would have gone because China was like an anchor on us.”

Karl Haeling of LBBW told AFP it was not immediately obvious what had sparked the sudden return to sell-off after Tuesday’s partial recovery.

“It just seems as if American traders, investors, walked in, looked at the overnight news and decided that central banks around the world are panicking,” he said.

Among individual companies, Disney sunk 5.6 percent a day after posting earnings far below expectations.