The Dow and broader U.S. stock market took a sudden turn lower Thursday afternoon, as markets reacted to President Trump’s latest tariff threat targeting $300 billion worth of Chinese imports. The latest round of hostilities came after the United States and China concluded two days of dialogue in Shanghai with very little to show for it.

Dow, S&P 500, and Nasdaq All Reverse Massive Gains

All of Wall Street’s major indexes declined sharply in afternoon trading, reversing a strong rally earlier in the day. The Dow Jones Industrial Average plunged 241.66 points, or 0.9%, to 26,622.61. The blue-chip index was up by more than 300 points earlier in the day before Trump ignited the 550-point swing.

The broad S&P 500 Index of large-cap stocks fell 0.7% to 2,960.42. Seven of 11 primary sectors reported losses, with energy, financials and industrials companies losing at least 2%.

Sliding technology stocks weighed on the Nasdaq Composite Index, which fell 0.7% to 8,120.92.

Trump’s Shock Revelation: U.S. Will Increase Tariffs on China

President Trump took to Twitter on Thursday to express optimism about ongoing U.S.-China trade talks, but he stunned Wall Street when he said a new round of tariffs would be implemented next month.

Beginning September 1, $300 billion worth of Chinese imports to the United States will face a “small additional tariff of 10%,” Trump tweeted.

“This does not include the [$250 billion] already tariffed at 25%,” he added.

Trade negotiations between the two countries resumed this week after more than two months of virtually no contact. Trump once again faulted China for reneging on a deal that could have been finalized as early as May. He also criticized Beijing for not following through on its promise to buy more American agricultural products.

Amid the trade war, investment flows between the U.S. and China fell have fallen to their lowest in five years, according to Rhodium Group. Two-way direct and venture capital investments totaled just $13 billion between January and June, an 18% drop from the second half of 2018 and the lowest since 2014.

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