U.S. stocks tumbled the most in six weeks and Treasuries ralliedas investors shifted focus from the Federal Reserve to the threatof an escalating trade war with China that has thepotential to disrupt global growth.

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The benchmark S&P 500 Index slumped the most since earlyFebruary and the Dow Jones Industrial Average lost more than 700points after President Donald Trump ordered tariffs on about $50billion in Chinese goods. The 10-year Treasury yield slid toward2.8 percent and the yen advanced as investors sought safe havens.The dollar rebounded.

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“The market doesn't like trade wars, the market doesn't likethat the Fed is adamant about raising rates,” saidMatt Schreiber, president and chief investment strategist at WBIInvestments in Red Bank, New Jersey. “Yes the economy has beenpretty strong, the labor market has less slack, but there's nothingto really get fired up about and try to normalize rates to a levelway above where we are.”

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The threat that a tit-for-tat trade spat with China will eruptand hamper global growth has investors on edge a day after the Fedsought to reassure markets that it's in no hurry to raise rateseven as it lifted growth projections for the world's largesteconomy. Trump's first trade action directly aimed at China comesas policymakers including IMF Managing Director Christine Lagardewarn of a global trade conflict that could undermine the broadestworld recovery in years.

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Stocks were also hit earlier when John Dowd resigned as Trump'slead attorney countering Special Counsel Robert Mueller's Russiaprobe as the inquiry into possible collusion in the 2016 electionintensifies.

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Facebook Inc. helped pace a decline in the tech sector, falling2.7 percent. This week's selloff in tech stocks is on pace to bethe worst since early February. Other notable decliners Thursdayincluded Accenture Plc and Micron Technology Inc.

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Elsewhere, West Texas oil fluctuated before falling and theAustralian dollar slipped after the country's unemployment rateclimbed. The British pound initially jumped after the country'scentral bank voted 7-2 to maintain interest rates, but pared asinvestors digested comments from policy makers that weren't overtlyhawkish.

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Stocks

The S&P 500 Index fell 2.5 percent as of 4:03 p.m. New Yorktime, while the Dow Jones Industrial Average dropped 2.9 percentand the Nasdaq Composite Index dipped 2.4 percent. The Stoxx Europe600 Index fell 1.7 percent and the MSCI Asia Pacific Index waslittle changed. The U.K.'s FTSE 100 Index dipped 1.5percent, touching the lowest in 15 months. The MSCI Emerging MarketIndex fell 1.2 percent.

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Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent, reboundingfrom the largest drop since January. The euro fell 0.2 percent to$1.2318. The British pound dropped 0.2 percent to $1.4111. TheJapanese yen rose 0.6 percent to 105.41 per dollar.

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Bonds

The yield on 10-year Treasuries fell six basis point to2.82 percent. Germany's 10-year yield dropped six basis point to0.53 percent, declining from the highest in more than a week.Britain's 10-year yield fell nine basis points to 1.44 percent.

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Commodities

West Texas Intermediate crude dropped 1.4 percent to $64.24 abarrel, easing from the highest in almost seven weeks. Gold fell0.3 percent to $1,329.07 an ounce a day after the biggest risesince May 2017.

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From: Bloomberg

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