Dow dips as Kudlow says Trump has 'not been satisfied' with China trade talks, readying new tariffs

Stocks traded lower on Monday as steep losses in some of the biggest tech shares pressured the broader market. Increasing tensions between the U.S. and China also put potential trade talks in doubt, dampening investor sentiment.

Director of the National Economic Council Larry Kudlow helped foster those tensions Monday after he told CNBC's Becky Quick that Trump has "not been satisfied" with the trade talks with Beijing.

"The president has suggested tariffs on a couple $100 billion" in Chinese goods, Kudlow said. "He has not been satisfied with the talks with China on this. My guess is that an announcement will be coming soon."

The Nasdaq Composite dropped 0.9 percent as shares of Amazon, Apple and Micron fell. The S&P 500 dipped 0.3 percent with tech and consumer discretionary underperforming. The Dow Jones Industrial Average fell 33 points.

Apple shares fell 0.6 percent amid fears it could be caught in the middle of a U.S.-China trade war. China is one of Apple's biggest markets. The tech giant said earlier this month that tariffs on Chinese goods could hurt its business.

Twitter dropped nearly 4 percent after MoffettNathanson reiterated its sell rating on the stock, noting cost growth should accelerate moving forward.

Micron's stock dropped 1 percent after analysts at BMO Capital Markets and Deutsche Bank slashed their price targets on the stock, citing weaker pricing for memory chips.

Amazon, meanwhile, declined more than 3 percent after an analyst at Citi suggested the company split into two to avoid antitrust scrutiny from the Trump administration. The stock was also on track to post its worst day since April.

"Apple and some of the chipmakers are down because of fears they may get hit with tariffs," said Kim Forrest, senior portfolio manager at Fort Pitt Capital. Forrest also noted that "some of the leadership may be a bit long in the tooth. If you bet these names will go up in perpetuity, ... I'm going to bet against you."

Lingering trade fears also put pressure on the broader market as investors braced for more tariffs on U.S. and Chinese goods.

President Donald Trump is looking to announce new tariffs on around $200 billion worth of Chinese imports as soon as Monday. Trump has also said he is "ready to go" with tariffs on another $267 billion in Chinese goods.

"The rift within the Trump administration on the appropriate approach to negotiations with China seems to be re-emerging," said Ed Mills, policy analyst at Raymond James. "Trade hardliners within the administration (Navarro/Lighthizer) have advocated for a more forceful approach and Trump appears to have once again sided with the hardliners, setting up continued escalation between the U.S. and China."

On Monday, Trump tweeted that tariffs have "put the U.S. in a very strong bargaining position," adding: "If countries will not make fair deals with us, they will be 'Tariffed!'"

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China's foreign ministry, meanwhile, stated China would retaliate in kind to the U.S. if it initiates fresh tariffs. This comes just days after news emerged that the U.S. was seeking to reignite trade discussions with China.

"If the imposition of those tariffs results in the cancellation of trade talks and Chinese restrictions on ex-ports, that's a market negative as it increases trade tensions," said Tom Essaye, founder of The Sevens Report, in a note.

"One potential scenario is the U.S. announces the tariffs, but delays their implementation until after the talks. If that occurs, then the situation shouldn't become a near term headwind. Regardless, it appears this trade drama between the U.S. and China is coming to a head in the coming weeks," Essaye said.

Boeing shares fell 0.3 percent. The company is considered a bellwether for global trade given its exposure to overseas markets.

— CNBC's Thomas Franck contributed reporting.

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