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Economy / Business

Stocks Tumble On Big Banks' Role In Money Laundering Report, Fears Of Relief Delay

U.S. stock indexes fell sharply Monday amid renewed economic tensions with China.
U.S. stock indexes fell sharply Monday amid renewed economic tensions with China.

The Dow falls more than 500 points as a report says large global banks were involved in transactions flagged as possible money laundering and hopes dim for Congress to pass another relief measure.

The Dow Jones Industrial Average fell nearly 800 points on Monday after China announced regulations that could threaten U.S. tech firms, which have been leading the stock market to new records. Continued economic uncertainty because of the pandemic and scrutiny of big banks also weighed down the stock market.

The Dow dove 2.7% and the broader S&P 500 index fell about 2% in midday trading. The Nasdaq composite index was down more than 1%.

Over the weekend, China announced rules for a new regulatory body that could blacklist foreign firms that unfairly treat Chinese companies or pose a threat to Chinese national security, NPR's Emily Feng reported.

China has not yet said which companies would be labeled "unreliable entities" — firms that threaten the development of Chinese companies — but Chinese state media have suggested that U.S. tech firms including Apple, Qualcomm and Cisco would be considered.

The latest tensions with China come as the Trump administration has threatened to bar the Chinese-owned TikTok and WeChat apps in the U.S.

Bank stocks fell Monday after a news report that JPMorgan Chase, Deutsche Bank and other giant banks defied money-laundering crackdowns.

The U.S. economic slowdown amid the coronavirus pandemic also continues to worry investors. Retail sales grew more slowly in August after an extra $600 per week in federal unemployment benefits expired.

The Federal Reserve has cut interest rates to historic lows and says it expects to keep them down through at least 2023, but Congress has been deadlocked about providing additional pandemic economic assistance.

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