U.S. stocks plunged Friday, with the Dow Jones Industrial Average dropping more than 600 points as President Trump vowed to retaliate against China's fresh round of tariffs on some U.S. goods beginning as early as Sept. 1.
The sell-off -- which at one point saw the blue-chip Dow down more than 700 points -- left all three major equity averages negative for the week.
China will raise import tariffs between 5 to 10 percent on $75 billion worth of goods. The tariffs will be placed on more than 5,000 U.S. products.
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The move appeared to enrage Trump. In a fiery tweet storm he warned that he will respond to Beijing’s most recent escalation of the trade war.
The president accused Beijing of stealing “vast amounts of wealth from the U.S.,” and ordered American companies to find alternatives to doing business with China. U.S. equity markets sold off sharply.
The U.S.-China clash overshadowed prospects for the Federal Reserve to cut interest rates next month.
Fed Chairman Jerome Powell offered little new insight into the U.S. central bank's plan for interest rates during the Jackson Hole Economic Symposium in Wyoming on Friday, promising to "act as appropriate" to sustain the record economic expansion. "
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"Because the most important effects of monetary policy are felt with uncertain lags of a year or more, the Committee must attempt to look through what may be passing developments and focus on things that seem likely to affect the outlook over time or that pose a material risk of doing so," Powell said in prepared remarks.
The yield on the 10-year Treasury fell to 1.53 percent.
U.S. crude oil dropped 3.5 percent to $53.88.
Gold prices, which closed up nearly 1 percent to $1,526.60 per ounce, booked their fourth straight week of gains and hit a six-year high.
Shares of U.S. auto and auto parts makers and major oil producers fell on the news.
European markets closed down on Friday. London's FTSE fell 0.5 percent, Frankfurt's Dax closed down 1.2 percent and France's CAC ended down 1.1 percent.
Asian markets finished the day with gains. Tokyo's Nikkei climbed 0.4 percent, China's Shanghai Composite rose 0.5 percent and Hong Kong's Hang Seng climbed 0.5 percent.
The Associated Press contributed to this article.