China on Wednesday warned it would retaliate against President Trump's new tariffs on imported steel and aluminum.
The Dow Jones industrial average fell as much as 306 points on Wednesday and closed down 248 points. The index was bogged down by concerns of possible Chinese retaliation against President Donald Trump's metals tariffs, disappointing retail sales, and another downward revision to the Atlanta Fed's first-quarter GDP forecast.
The 30-stock index attempted to claw its way back to the green in the afternoon as Trump named CNBC commentator Larry Kudlow as his top economic advisor, replacing Gary Cohn.
Early Wednesday, China's National People's Congress spokesperson threatened to retaliate to the US president's proposed new tariffs on steel and aluminum, according to reports. China doesn't want a trade war, the politician said, but it will respond in kind if Trump's tariffs harm it economically.
In economic data, retail sales unexpectedly fell for the third straight month, according to statistics published by the government. Additionally, the Atlanta Fed's latest projection for first-quarter GDP was revised down to 1.9%. It had been as high as 5.4% in early February.
Boeing, which could be a potential target of retaliatory tariffs by China, was among the hardest hit, falling more than 4%. China has agreed to buy about $1 trillion worth of aircraft over the next two decades from the company.
Companies that get a high percentage of their revenue from China are also at heightened risk as the prospect of a global trade war mounts, according to UBS. The Swiss bank identified 11 stocks to avoid if a trade war does break out.