Global stock indexes sank Wednesday after the Trump administration released a list of $200 billion in goods that could be hit with tariffs and China said it would retaliate. The dollar spiked, and big exporters plunged.
Companies that sell computer chips, oil, basic materials, and heavy machinery dropped after the Trump administration proposed a 10 percent tax on a wide list of imports. It is scheduled to make a decision after Aug. 31.
China’s government said it will take ‘‘firm and forceful measures’’ if the new tariffs are enacted. That response would probably include measures other than tariffs. Trump has threatened to put new taxes on almost everything imported from China.
Jack Ablin, chief investment officer for Cresset Wealth Advisors, said tariffs can have big effects: a tariff on an import from one country can lead to broad price increases for similar items, and rising taxes and costs might cause companies to change their supply lines in less efficient ways.
‘‘When you start adding all of that together, you end up with typically higher inflation and low productivity,’’ he said. ‘‘Higher inflation tends to rob consumers of their income, and lower productivity tends to rob companies of their profits.’’
A four-day winning streak for the S&P 500 ended as the benchmark index lost 0.7 percent, to 2,774.02. The Dow Jones industrial average dropped 0.9 percent, to 24,700.75. The Nasdaq fell 0.5 percent, to 7,716.61. The Russell 2000, an index of smaller and more US-focused companies, gave up 0.7 percent, to 1,683.66.
The S&P 500 had closed at a five-month high Tuesday.
The list of new tariff targets from the US Trade Representative includes vacuum cleaners, furniture, and car and bicycle parts, but US-branded smartphones and laptops were excluded. Still, chip makers, which make large portions of their sales in China, slumped. Nvidia fell 2.3 percent, and Micron Technology lost 2.8 percent.
Construction equipment maker Caterpillar lost 3.2 percent, and farm equipment maker Deere lost 2.2 percent.
The ICE US dollar index jumped 0.6 percent, a large move. The dollar rose sharply against the Japanese currency, increasing to 112.04 yen from 111.28 yen. The euro fell to $1.1674 from $1.1745.
The stronger dollar hurts exporters because it makes US goods and commodities more expensive in other markets. Crude oil prices tumbled partly because of the rising dollar and partly because Libya said it will start exporting oil again, a move that will increase supplies.
Benchmark US crude fell 5 percent to $70.38 a barrel in New York. Brent crude, used to price international oils, plunged 6.9 percent to $73.40 in London.
On Friday, the United States and China put 25 percent taxes on $34 billion in imports. China imported only $130 billion in goods from the United States last year, but it could retaliate through other means, including regulatory moves and investigations of US companies.
The trade dispute stems from Washington’s complaint that Beijing steals or pressures companies to hand over technology, and concerns that plans for state-led development of Chinese companies in robotics and other fields might erode American industrial leadership.
Indexes in Europe and Asia took steeper losses as investors worried the worsening trade dispute will hurt the global economy. France’s CAC 40 and the DAX in Germany both lost 1.5 percent. Britain’s FTSE 100 index dropped 1.3 percent.
Japan’s benchmark Nikkei 225 fell 1.2 percent, and the South Korean Kospi lost 0.6 percent, while Hong Kong’s Hang Seng shed 1.3 percent.
Airlines took sharp losses after American said it expects slower fare growth in the United States. American Airlines slumped 8.1 percent, and United Continental slid 3.4 percent.
Twenty-First Century Fox raised its offer for European pay TV service Sky. Fox already owns 39 percent of Sky. Fox says the new offer values Sky at $32.5 billion. Fox’s stock lost 4 percent; in the United Kingdom, Sky’s stock fell 0.5 percent.
Bond prices moved higher. The yield on the 10-year Treasury note fell to 2.84 percent from 2.87 percent.
The dip in bond yields helped utility companies make small gains. Utility companies tend to pay large dividends, so investors who want income often buy them when bond yields fall.