Dow slides on trade fears

Trade jitters continue to weigh on Wall Street.

The Dow slid as much as 338 points on Wednesday as President Trump escalated threats to clamp down on Chinese trade. That set off fears of retaliation from the world’s second largest economy. The S&P 500 fell 0.5%, but the Nasdaq inched up 0.4%.

Reuters reported on Tuesday that Trump was considering tariffs of up to $60 billion on Chinese imports in response to China’s alleged theft of US intellectual property. The US Trade Representative’s office declined to comment on possible tariffs.

The tariff report came on the heels of Trump blocking a $117 billion deal between chipmakers Broadcom and Qualcomm — an attempt to curb China’s growing progress in the global technology race.

“The market is hyper-vigilant on potential action from the White House,” Quincy Krosby, chief market strategist at Prudential Financial, said.

Boeing, the United States’ largest exporter, tumbled 4%, shaving 100 points off the Dow.

Investors are worried that Boeing would be caught in the crosshairs in a trade fight between the two countries. China is Boeing’s second largest market behind the United States.

The market has been under pressure since Trump announced plans to implement 25% tariffs on imported steel and 10% on aluminum. Trump signed off on the tariffs last week, granting exemptions to Mexico and Canada. The administration would decide further exemptions on a country-by-country basis, Trump said.

The Federal Reserve’s course on raising interest rates is also an open question for investors.

The Fed has signaled it intended to raise rates three times this year, but concerns about rising wage growth and creeping inflation could force it to act more quickly than planned.

On Wednesday, retail sales data came in weaker than economists estimated, a signal the Fed may not need a fourth hike to keep inflation in check. New Fed chair Jerome Powell will preside over his first Fed meeting next week.

Yields on the 10-year Treasury note, which have been climbing as expectations of additional interest rates rise, fell Wednesday to 2.80%.

–CNNMoney’s Matt Egan contributed to this report.