Here are five things you must know for Tuesday, June 19:
1. -- Stocks Plunge as Trump Issues New Tariff Threats Against China
U.S. stock futures plunged on Tuesday, June 19, and global stocks were sinking after Donald Trump threatened to unleash a fresh round of tariffs on $200 billion worth of goods from China in the latest escalation of trade war rhetoric between the world's two biggest economies.
Trump said a 10% levy would apply "after the legal process is complete" if China "refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced," a reference to Beijing's intent to match a list of $50 billion worth of goods now subject to tariffs from Washington. China called Trump's latest salvo "blackmail" and said trade wars would harm "not just the people of China and the U.S. but all over the world."
"Given the position that the two sides in the showdown have staked out, it is difficult to see how either side will back down from its position," said Saxo Bank currency strategist John Hardy. "China because it wouldn't want to be seen as bullied by Trump and Trump because his position taps into popular sentiment and is likely to remain a popular theme in the election cycle."
Contracts tied to the Dow Jones Industrial Average
TheStreet argued there could be a big down day for the markets soon.
The U.S. economic calendar on Tuesday includes Housing Starts for May at 8:30 a.m. ET.
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2. -- Apple's iPhones Reportedly to Be Spared From China Tariffs
The Trump administration has told Apple Inc. (AAPL) CEO Tim Cook that it wouldn't place tariffs on iPhones, which are assembled in China, The New York Times reported, citing a person familiar with the talks.
Cook visited Trump last month to warn him that tough talk on China could threaten Apple's position in the country.
Apple is worried China could retaliate in ways that hurt its business, according to three people close to Apple, the Times reported.
Apple fears "the Chinese-bureaucracy machine is going to kick in," meaning the Chinese government could cause delays in its supply chain and increase scrutiny of its products by citing national-security concerns, according to one person close to the company, the Times reported.
Apple has sold more iPhones in China than it has in the U.S. for the past three years and relies on mainland Chinese sales for around 20% of its nearly $200 billion in annual revenue.
Shares of Apple were down 1.2% in premarket trading on Tuesday.
3. -- Senate Blocks White House Plan to Reinstate ZTE
ZTE is accused of violating trade laws by selling sensitive technologies to North Korea and Iran. The Trump administration announced a deal with ZTE earlier this month, but the Senate's Republican leaders have moved to reverse it.
The Senate approved the bill, 85-10, sending it to the House, which approved the defense policy bill last month without the ZTE provision.
Donald Trump is scheduled to meet with House Republican lawmakers on Tuesday evening, when the topic of ZTE could come up, and is expected to meet Wednesday with Senate Republicans to find ways to ensure ZTE can resume business, The Wall Street Journal reported.
ZTE shares fell more than 25% in Hong Kong on Tuesday.
4. -- GameStop Jumps on Report It's Considering a Buyout
GameStop Corp. (GME) jumped 9% on Monday following a report it might be selling itself off to a private-equity firm.
A Reuters report published Monday said the video game and electronics retailer tapped a financial adviser to explore a sale. Sycamore partners, a private-equity firm specializing in retail and consumer investments, was named as one of the firms interested in buying GameStop. Sycamore has previously bought out mall retailers like Hot Topic, The Limited, Talbots and Staples.