US stocks stumbled at Tuesday's open, the morning after President Donald Trump threatened an all-out trade war with China. The S&P 500 fell by about 1% and the Dow Jones industrial average lost 1.3% after heavy overnight selling dropped China's Shanghai Composite (-3.78%) to its lowest level in two years.

"Therefore, today, I directed the United States trade representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent," Trump said on Monday. "After the legal process is complete, these tariffs will go into effect if China refuses to change its practices and also if it insists on going forward with the new tariffs that it has recently announced."

Monday's announcement came days after Beijing announced tariffs on $50 billion worth of US goods in a tit-for-tat response to those finalized by Trump earlier Friday. Neither of those tariffs have gone into effect yet.

Materials and industrials lost at least 1.4% each early Tuesday as Boeing (-3.1%) and Caterpillar (-2.8%) dragged the Dow lower.