NEW YORK (AP) — U.S. stocks tumbled on Wall Street Friday after the U.S. announced plans to expand its trade war to Mexico.
The slump all but guarantees that May will be the first monthly loss for the market in 2019.
The new front in the trade war is hitting automakers particularly hard. Many of them import vehicles into the U.S. From Mexico.
Technology stocks led the decliners. They have been hurt the most over escalating rhetoric and tariffs in the U.S. trade war with China. Cisco fell 2.2 % and Apple fell 1.2%.
Banks were among the sharpest decliners as higher bond prices pushed yields lower. Investors have been shifting more money into bonds over concerns that economic growth will be crimped by the ongoing trade war. Lower bond yields make loans less profitable for banks. Citigroup fell 2% and Bank of America fell 1.7%.
Energy companies are sinking under the weight of falling oil prices. The price of crude oil slid 3%. Chevron fell 1% and Valero Energy fell 3.6%.
Utilities eked out gains. The sector is considered less risky by investors and a safer haven for money when economic growth seems threatened.
Investors have been fleeing to safer holdings all month. The shift to utilities and bonds quickened earlier in May after the U.S. and China broke off negotiations. The U.S. then pushed more tariffs on Chinese goods along with a ban on technology sales. That prompted retaliatory tariffs from China and threats over other key resources.
A smattering of late season earnings reports are also helping to move certain stocks. Williams-Sonoma rose on a solid first quarter financial report while retailer Gap plunged on weak results.