* USD index weakens after Powell speech, Trump tweets
* Trump threatens further action on China
* U.S. crude posts weekly decline; Brent ekes a gain
* U.S. two-year/10-year yield curve inverts
(Updates after U.S. market close with new Trump tweets)
By Rodrigo Campos
NEW YORK, Aug 23 (Reuters) - Stocks, the dollar and oil
prices fell on Friday while safe havens rose after President
Donald Trump demanded U.S. companies look at alternatives to
China for manufacturing, following Beijing's retaliatory tariffs
on American goods.
China's Commerce Ministry said in a statement early on
Friday it would impose tariffs on about $75 billion in imports
from the United States including some agricultural products,
crude oil and small aircraft. Trump responded mid-morning in a series of tweets, writing
that "American companies are hereby ordered to immediately start
looking for an alternative to China." Trump cannot force U.S. companies to abandon China and he
gave no detail on how he might proceed with any such order. But
his series of tweets was seen as a harbinger for yet another
escalation of the trade war.
After markets closed in New York, Trump tweeted the United
States would raise tariffs on $250 billion worth of Chinese
imports to 30% from 25% beginning Oct. 1. "Additionally, the remaining 300 BILLION DOLLARS of goods
and products from China, that was being taxed from September 1st
at 10%, will now be taxed at 15%," he wrote.
The morning's tweets "certainly heightened concerns about
trade and its drag on global growth," said Craig Bishop, lead
strategist of the fixed income group at RBC Wealth Management at
Minneapolis.
"It has heightened chances of a recession. The President is
his own worst enemy when he tries to manage both fiscal and
monetary policies."
Stocks that benefit during economic expansions fell the most
on Wall Street, also hinting at recession concerns.
"There is a lot of worry here. I would say what (Trump) is
tweeting is disconcerting. It's a fair reaction from the
markets. I don't think anyone thought we'd get to this level,"
Michael O'Rourke, chief market strategist at JonesTrading, said
during market hours.
The Dow Jones Industrial Average .DJI fell 623.34 points,
or 2.37%, to 25,628.9, the S&P 500 .SPX lost 75.84 points, or
2.59%, to 2,847.11 and the Nasdaq Composite .IXIC dropped
239.62 points, or 3%, to 7,751.77.
The pan-European STOXX 600 index .STOXX turned sharply
lower after Trump's tweets, dropping 1% in the last half hour of
trading to close down 0.78%, while MSCI's gauge of stocks across
the globe .MIWD00000PUS dropped 1.57%.
Emerging market stocks lost 0.20%, an index of Latin
American shares .MILA00000PUS dropped more than 3% to close at
its 2019 low and U.S. dollar-denominated Nikkei futures NKc1
fell 2.0%.
OIL, YIELDS FALL
Oil prices fell after China's retaliatory tariffs
announcement highlighted concern that the trade dispute between
the world's two largest economies could slow global growth or
even trigger a recession.
Trump's tweets made matters worse.
"We still view the U.S.-Chinese trade standoff as a major
bearish consideration that will likely be requiring additional
downward oil demand adjustments as this year proceeds," said Jim
Ritterbusch, president of Ritterbusch and Associates.
U.S. crude CLc1 fell 2.67% to $53.87 per barrel and Brent
LCOc1 was last at $59.11, down 1.35% on the day.
Trump's comments came after Federal Reserve Chair Jerome
Powell said the U.S. central bank will "act as appropriate" to
keep the economic expansion on track, but noted rising risks.
Powell's remarks had given markets some relief after the
overnight announcement from Beijing. Trump's tweeted response to
the speech asked who is "our bigger enemy" between Powell and
China's President Xi Jinping.
The two-year/10-year yield curve inverted last week for the
first time since 2007, a signal that a U.S. recession is likely
in one to two years. The curve has traded in and out of
inversion over the past three days.
U.S. Treasury yields fell, with 10-year notes US10YT=RR
last up 22/32 in price to yield 1.5351%, from 1.61% late on
Thursday.
The U.S. dollar fell after Powell's comments and dropped
further after Trump's tweets.
The dollar index .DXY fell 0.47%, with the euro EUR= up
0.53% to $1.1137.
The Japanese yen strengthened 0.95% versus the greenback at
105.45 per dollar, while sterling GBP= was last trading at
$1.228, up 0.24% on the day.
Spot gold XAU= added 1.8% to $1,525.37 an ounce.
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Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
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