The S&P 500 fell by some 2%, a decline that placed both Dow Jones and the S&P "on pace for their worst day since January 3." As for the Nasdaq, it fell by 2.3%.
According to NBC News, tech stocks "took the heaviest blows" as a result of an ongoing trade war between the US and China. The latest development has reportedly prompted investment banks to begin working on a "worst-case scenario" plan, CNBC reported.
"Trade war concerns have ebbed and flowed in the last eighteen months, that part isn't new," Putri Pascualy, managing director for investment firm PAAMCO, told Fox Business.
"What is new is market reaction. Previously, investors happily shrugged trade risk, citing growth as a reason for bullishness. These days, risk factors aren't being shrugged off so easily. The math on risk premia for multiple asset classes have changed."
— Donald J. Trump (@realDonaldTrump) May 6, 2019
Although a sell-off initially began over the weekend after US President Donald Trump hinted at slapping tariffs on all imported goods from China, things came to a boil on Tuesday after US Trade Representative Robert Lighthizer informed reporters that tariffs on Chinese imports would be increased from 10% to 25%. The increase is set to take effect on Friday.
