A 3 percent nosedie on Wall Street amid a worldwide plunge in stock markets Monday... as China goes tit-for-tat with the U.S. in an escalation of the trade war between the world's two biggest economies.
China allowed the value of its currency the yuan - to drop to its lowest level since the financial crisis.
The move was largely seen as a retaliation for President Trump's threat to slap tariffs on the rest of Chinese imports not covered by other tariffs.
SOUNDBITE (ENGLISH): CONWAY G.
GITTENS, REUTERS BUSINESS CORRESPONDENT, SAYING: "The damage was widespread on Wall Street.
By the closing bell, the Dow dropped 767 points; its worst day of the year.
Investors are really feeling the pain coming on the back of the biggest weekly drop in stocks for 2019." Reuters economic and financial markets editor Dan Burns says the severity of the selling is a sign investors are worried when it comes to this trade war - the gloves are off.
(SOUNDBITE) (English) DAN BURNS, REUTERS ECONOMIC AND FINANCIAL MARKETS EDITOR, SAYING: "You have the number one and number two economies in the world - the United States and China - now going toe-to-toe, apparently no-holds barred in an all-out trade war.
And investors are worried that at this point it just means that the prospects to de-escalate are diminishing day by day." Global money - finding no place to hide in equity markets - as investors fear the global economy will be sucked into the fight.
European stocks tumbled in their biggest two-day sell-off in more than three years.
And stocks across Asia were pummeled to their lowest level in half a year.
But are investors over-reacting?
Some on Wall Street say - no - that the significance of China allowing its currency to fall below 7-to-the-dollar can't be overstated.
(SOUNDBITE) (English) DAN BURNS, REUTERS ECONOMIC AND FINANCIAL MARKETS EDITOR, SAYING: "The yuan has weakened by 2-1/4 percent that's an enormous move in any currency.
What does that mean for U.S. manufacturers, well, Chinese imports continue to get, remain cheaper even in the face of tariffs.
Now the yuan would have to cheapen even more from here - say another six, seven, eight percent for it to completely offset the effects of new tariffs but it certainly blunts the impact." The escalating trade war making it harder for U.S. companies that do a lot of business in china..
That 's why companies such as Apple, Boeing, and chip makers like Intel - were hardest hit in Monday's tumble.
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