Markets Now: Why's the Dow Slumping When the Nasdaq Is Almost Flat?

11:33 a.m. Talk about divergences. The Dow Jones Industrial Average is still off 287.29 points, or 1.2%, at 24,321.69, but the S&P 500 has cut its drop in half--it's down 0.5% at 2664.49--and the Nasdaq is down just 0.3% at 7161.77.

A quick look at the Dow shows you why. The biggest loser is Boeing (BA), which has fallen 2.9% to $339.42, while Caterpillar (CAT), has dropped 2.6% to $146.30 and 3M (MMM) is off 1.9% at $226.95. Those are three of the four biggest point losers in the Dow, a price-weighted index, and they also happen to be the ones that could get hit hard in a tit-for-tat trade war. They have less impact on the S&P 500 and none on the Nasdaq.

So maybe this really is about tariffs after all.

10:04 a.m. Yesterday, the S&P 500 suffered its third consecutive drop of 1% or more, its first since 2016. And with the S&P 500 off 0.8% at 2,657.44, the benchmark could be on its way to a fourth. The last time that happened was in August 2015 around the time of China's devaluation of the yuan.

Yes, tariffs are getting the blame but, as we pointed out earlier, other factors are at play as well. Rhino Trading's Michael Block notes that the Bank of Japan's Haruhiko Kuroda laid out the conditions that could see the bank exiting its super-accomodive monetary policy by 2019. "It doesn’t surprise us when there is hawkish Fed talk but hawkish BOJ talk is a real man bites dog story," Block says. He says he wouldn't be looking to buy until the S&P 500 hits 2600.

The Dow Jones Industrial Average has dropped 289.16 points, or 0.12%, to 24,319.82. The Nasdaq Composite has fallen 0.8% to -52.68.

7:34 a.m. Can we make it four? We're halfway there, with S&P 500 futures off 0.5%, while Dow Jones Industrial Average futures have dropped 188 points, or 0.8%. Nasdaq Composite futures have fallen 0.7%. It's not hard to see why markets continue to slide, as the responses from other countries start to come in. European Commission President Jean-Claude Juncker was quoted as saying that the "EU will react firmly and commensurately to defend our interests" while Canada's Foreign Minister Chrystia Freeland said that "Canada will take responsive measures to defend its trade interest and workers."

That's just what the markets need right now, isn't it?

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