Wall Street opens sharply lower as tariffs hit home and global worries mount

Wall Street opened sharply lower on Tuesday morning, after disappointing quarterly earnings from strong drivers on the Dow Jones Industrial Average added to mounting geopolitical concerns that fueled a plunge in global markets overnight.

The Dow fell by over 400 points amid a glut of less-than-stellar corporate earnings and global unease over President Donald Trump’s escalating trade war with China and fears of Saudi Arabia isolation as the U.S. weighed possible retaliatory measures for the death of journalist Jamal Khashoggi.

Major Dow components Caterpillar and 3M pulled down the blue-chip index.

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Caterpillar fell by almost 8 percent — despite earnings that beat expectations — as investors shed shares they considered to have been overpriced and digested the full impact of Trump's tariffs on the construction giant.

"Manufacturing costs were higher due to increased material and freight costs. Material costs were higher primarily due to increases in steel prices and tariffs," said Caterpillar in a statement.

Shares in 3M took a dive of more than 7 percent after the company missed expectations and cut back its guidance for the remainder of 2018.

Bank of America shares fell by 1.5 percent on fears that rising interest rates would lead to a pullback in mortgage demand.

This is a blockbuster week for earnings, with more than 150 companies set to report. Yet investors remain skittish after last week's 800-point drop in the Dow and heightened concern about the Federal Reserve raising interest rates and stunting corporate expansion.

The Dow has been lower for three out of the past four days and the S&P 500 is struggling with a fifth straight day of declines.

“There are a number of underlying risk factors in the markets right now, be it U.S. interest rates, Brexit, Italian debt, trade wars or emerging markets,” said Craig Erlam, senior market analyst at Oanda currency trader. "These are all destabilizing factors and sentiment may finally be caving under the weight of it all.”