Dow falls 700 points on China trade confusion and mounting fear tariffs are choking global growth

The Dow Jones Industrial Average fell by more than 700 points in Tuesday trading, continuing a shaky start to the week prompted by confusion over a thaw in U.S.-China trade relations.

The Dow fell by as much as 719 points, or 2.8 percent by mid-afternoon Tuesday, for a total drop of 800 points. The S&P 500 lost 2.8 percent of its value, and the Nasdaq fell by 3.3. percent.

The decline on the blue-chip Dow came just one day after a 300-point rally, with investors cheering news that President Donald Trump and China's President Xi Jinping had settled their differences at the G-20 economic summit over the weekend.

Trump announced via a weekend tweet that China would "start purchasing agricultural product immediately," and that "China has agreed to reduce and remove tariffs on cars coming into China from the U.S." Treasury Secretary Steven Mnuchin echoed the positive sentiment, telling CNBC on Monday, "This is the first time that we have a commitment from them that this will be a real agreement."

On Tuesday, Trump tweeted, "The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina."

However, no joint statement from the U.S. and Chinese trade teams was issued after the leaders of the world's two largest economies met on Saturday on the sidelines of the G-20. While the Chinese Foreign Ministry acknowledged that further talks on tariffs would proceed, Beijing has yet to corroborate details on any major parts of the trade agreement, with Chinese state media avoiding any reference to a 90-day condition, nor did it mention an agreement to unilaterally reduce car tariffs.

"The market is reassessing if anything tangible happened at the Trump-Xi dinner," Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company, told MarketWatch.

A protracted tit-for-tat over import tariffs has dominated the economic landscape since Trump first imposed them in January, with markets in turn rallying and tanking as investor sentiment veered. A report issued Tuesday from a Swiss freight company noted that global trade grew just 0.3 percent last month, compared to 3.1 percent for November 2017. The Organization for Economic Cooperation and Development forecast that global growth would slow from 3.7 percent this year to 3.5 percent in 2019 and 2020.