Stocks opened today by giving back more than half their gains from Monday.

The reason: China was telling the Trump administration it won’t be bullied.

Last week, President Trump threatened a sharp increase in tariffs on Chinese imports in a bid to get a trade deal successfully negotiated.

China’s first response Tuesday was to ban Chinese companies from doing business with U.S. subsidiaries of a South Korean shipbuilding giant. The reason: In China’s view, the companies supported the U.S. government and hurt Chinese firms’ interests. 

Image source: Michael M. Santiago/Getty Images

Treasury Secretary Scott Bessent told the Financial Times that China was in the midst of a recession and “they want to pull everybody else down with them.”

The result at last check: The Dow Jones Industrial Average fell 360 points to 45,707. The decline was about 41% of the 879-point gain the index enjoyed Monday.

The Standard & Poor’s 500 Index was off 63 points, or 1%, to 6,592. The Nasdaq Composite dropped 340 points, or 1.5%, to 22,354. Both losses were substantial givebacks from their Monday rebounds

The market pullback came despite solid earnings from some of the nation’s biggest financial institutions, including JP Morgan Chase, Goldman Sachs and Wells Fargo.

General Motors shares ticked lower as the automaker reported a $1.6 billion writedown to reflect reduction of its electric-vehicle-manufacturing capacity. GM cited reduced demand after tax credits for EVs ended under the Trump administration. The shares dropped nearly 3% premarket but at last check were off just 0.2% to $55.50.

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