China, Europe warn trade war could trigger global recession

This is starting to look like a high stakes ping pong match with another CNBC headline saying it all: 'Dow drops more than 300 points as investors brace for further trade actions against China'.

Investor concerns are growing after news, first reported by the Wall Street Journal, that the U.S. Treasury wants to curb both Chinese investment in tech and tech exports to China. On Monday morning, however, Treasury Secretary Steven Mnuchin tweeted that the WSJ report was "fake news" and said the policy being prepared by the Treasury Department "will be out not specific to China, but to all countries that are trying to steal our technology".

The economy "is going to a lovely place right now", Navarro said on CNBC.

"On the margin, it's helpful, but it shows conflicting signals from the administration, so the situation remains unsettling", said Jim Awad, senior managing director at Hartland & Co in NY. Among some of the more notable declining stocks in Canada: Suncor Energy Inc. fell 3.5 per cent, National Bank of Canada fell 2.4 per cent and marijuana producer Canopy Growth Corp. fell 5 per cent.

"There is no way Trump's tariffs on the European Union and China could benefit the USA economically", Lim continued, explaining that they will increase costs for consumers, hurt business and decrease profits. Harley-Davidson shares tumbled 6.0 percent. CFIUS reviews-or the threat of reviews-have largely halted Chinese purchases of US semiconductor companies.

The CBOE Volatility index, known as Wall Street's fear gauge, spiked to its highest level in almost a month.

Last month, Mnuchin said a trade war with China was "on hold" after officials of the world's two largest economies held talks in Beijing that were focused on opening more sectors of China's economy and increasing purchases of American goods.

The so-called FANG stocks, which have led momentum in USA stocks, were lower after having hit record intraday highs last week.

After his comments, stocks recovered some ground and the benchmark Dow Jones Industrial Average closed with a loss of 1.3 percent, or 325 points. Facebook Inc dropped 2.7 percent, Inc fell 3.1 percent, Netflix Inc slid 6.5 percent, and Alphabet Inc lost 2.6 percent.

The Dow, a narrow gauge of 30 US stocks, has declined in nine of the past 10 trading days - a remarkably long losing streak that adds up to a 4.6 per cent decline.

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