What's moving markets today: May 6, 2019

By CNN Business

Updated 7:49 a.m. ET, May 7, 2019
12 Posts
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9:47 a.m. ET, May 6, 2019

Stocks open sharply lower; Dow plummets 450 points

From CNN Business' Anneken Tappe

US stocks started the day deep in the red after President Donald Trump threatened further tariffs on Chinese goods, derailing market hopes for a near-term trade deal.

  • The Dow opened 1.8%, or 450 points, lower
  • The S&P 500 kicked off down 1.5%
  • The Nasdaq opened 2.2% lower

Stocks in the industrial sector and those with tight ties to China fell.

Apple (AAPL) shares dropped 2.6%. Boeing (BA) and Caterpillar (CAT) both fell as well, trading 2.5% and 2.4% lower, respectively.

9:34 a.m. ET, May 6, 2019

Warren Buffett says the market reaction is 'rational'

From CNN Business' Jordan Valinsky

Billionaire Warren Buffett says the market declines are "rational" following the new flare up between China and the United States over trade.

In the same CNBC interview, Buffett said "if you went to bed a week ago and you thought there was a 1% chance of a trade war and then subsequent events make you think there’s a 10% chance, markets reflect that very quickly."

Earlier today, Buffett said a new trade war would "be bad for the whole world."

9:49 a.m. ET, May 6, 2019

Uber picked one hell of a week to go public

From CNN Business' Seth Fiegerman

Uber outmaneuvered rivals, weathered an endless series of scandals and restocked virtually all of its C-Suite in a remarkably short period of time in order to go public.

But now, Uber may need to overcome a new hurdle: President Donald Trump's tweets.

President Trump surprised investors by threatening to impose higher tariffs on China in a tweet on Sunday. The Dow fell 450 points at the open on Monday morning, as the market once again confronted trade war fears.

That could be bad news for Uber. The ride-hailing company is the latest -- and biggest -- tech unicorn racing to go public, with its Wall Street debut expected on Friday.

10:10 a.m. ET, May 6, 2019

Soy bean futures are tanking on trade war fears

From CNN Business' Anneken Tappe

Soy bean futures were down 2.9% Monday morning as trade tensions between the US and China flared up again.

That's their biggest one-day drop since August 2018, according to Refinitiv.

Financial markets had expected a resolution to the trade war issues. Instead, President Donald Trump rattled markets with threats to further tariffs against Chinese goods

Soy beans have arguably been the commodity at the heart of the Chinese-American trade spat. They are the largest single US export to China.

9:12 a.m. ET, May 6, 2019

S&P 500 will open lower, but it might not end that way

From CNN Business' Jordan Valinsky

S&P 500 is set to open more than 1.5% lower as it reacts to President Donald Trump's new threat on Chinese tariffs.

Just because it opens lower, that doesn't mean it will end the day that way. According to analysts at Bespoke, the S&P has "bounced back in a big way" on these type of days. In fact, it has actually closed in positive territory in 6 of the last 8 days that it opened down more than 1%.

And those prior days when it was lower, it was largely related to "some sort of trade issue," the analysts note.

7:34 a.m. ET, May 6, 2019

Christine Romans: Trump could accept a weak deal for a 'headline win'

From CNN Business' Christine Romans

Boom, just like that Sunday's tweet from President Donald Trump reminds investors all over the world that a trade deal with China is not guaranteed.

The backdrop of recent stock market gains has been the assumption a deal would get done. The biggest question until now was whether the Trump administration would accept a weak deal for the sake of a headline win.

But with a Chinese delegation set to meet in Washington this week with US negotiators, the president has pivoted. He's now threatening to jack up existing tariffs and impose huge new ones.

In stock market action, I'll be watching to see how deep the losses are. A 2% decline in US stock indices wouldn't be a surprise given how much stocks have run up this year.

Year-to-date the Dow is up 13.5%, the S&P 500 is up 17% and the Nasdaq is up 22%.

Also, if the president's threats bring more Chinese concessions on structural issues like industrial subsidies for its industries, that is a market positive.

7:28 a.m. ET, May 6, 2019

'Shocking escalation:' What analysts are saying about the new tariff tangle

From CNN Business' Jordan Valinsky

Analysts are expressing shock and disbelief about President Donald Trump's new threats with China over tariffs:

  • "Shocking escalation — even on Trump standards," Chris Krueger, analyst at Cowen Washington Research Group, told clients in a note Sunday.
  • "A big underpinning of the rally was this consensus that a trade deal with China would eventually get done," said Michael Block, market strategist at Third Seven Advisors. "This tweet may be a tactic but it has bulls unglued and playing what if."
  • "His move injects major uncertainty into negotiations, which now face a rising risk of an extended impasse — perhaps even through the US presidential election," Michael Hirson, head of China and Northeast Asia at the Eurasia Group, wrote in a note on Sunday.

Read more from our Matt Egan here.

7:37 a.m. ET, May 6, 2019

Market data you need now in one place

7:03 a.m. ET, May 6, 2019

Warren Buffett says trade war would be 'bad for the whole world'

From CNN Business' Jordan Valinsky

Investor Warren Buffett is commenting President Donald Trump's new threat to hike tariffs on China, which resulted in a stock slide.

If we actually have a trade war, it would be bad for the whole world. It could be very bad depending on the extent of it," Buffett told CNBC.

He added that China and the United States are playing a "dangerous game."