US stocks drop for a second day as Trump reignites his global trade war

Christophe Petit Tesson/Pool via AP

• Major US indexes closed lower for the second straight day after President Donald Trump expanded the scope of his trade war to potentially include France.
• The president is targeting the European nation over a proposed tax that could affect major US technology companies including Amazon, Facebook, and Google.
• The Trump administration also issued new threats of tariffs on another $300 billion worth of Chinese imports just two weeks after the US and China agreed to restart trade negotiations.
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US stocks took another hit on Wednesday as President Trump's trade war extended its reach to France.

The Trump Administration is preparing to retaliate against a new tax proposed by France that would impact US technology companies including Amazon, Facebook, and Google. France's 3% tax was rolled out after the European Union decided not to pursue action against tech companies' tax practices.

In the past, Trump has threatened to impose auto tariffs on the EU and said the bloc engages in currency manipulation. The administration has also talked about implementing tariffs on the EU over aircraft subsidies.

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The recently restarted trade discussions between China and the US have also seen new tensions arise. President Trump suggested applying more tariffs to another $300 billion worth of Chinese imports earlier this week.

Here's a look at today's closing numbers:

• The S&P 500 fell by 0.65% to 2,984.42
• The Dow Jones Industrial Average fell by 0.42% to 27,219.85
• The Nasdaq Composite fell by 0.46% to 8,185.21

CSX tanked by as much as 12% on Wednesday after the company cut its profit outlook blaming the impact of the Trump administration's trade war on the economy. The CEO said the current economic backdrop is most "puzzling" he's ever seen.

Meanwhile, Cintas raised its profit guidance for 2020 as the business services provider continues to benefit from a strong labor market. The June jobs report saw 224,000 nonfarm payroll added to the economy, outpacing expectations of 164,000.

Within the S&P 500, these were the largest gainers:

• Cintas Corp: 8.74%
• Hershey Company: 3.76%
• Abbott Laboratories: 3.14%

And the largest decliners:

• CSX Corp: (-10.27%)
• Textron Inc: (-9.53%)
• Norfolk Southern: (-7.48%)

Industrials and energy dropped the most among all 11 major sectors in the S&P 500 today. The S&P 500's Industrials index fell by 2.2%, while the energy and consumer discretionary groups lost more than 0.9%.

The utilities sector posted the only material gains with an increase of about 0.4%.

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