The Dow Jones Industrial Average dropped close to 400 points Monday afternoon over concerns that the U.S.-China trade war might be worsening and as 10-year Treasury yields continued to tumble, led lower by financial stocks.
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Investors are worried President Trump's impending Sept. 1 tariff hike on more Chinese imports will scuttle talks aimed at ending their trade war.
Those fears are being somewhat offset by hopes global central banks will keep interest rates low to shore up economic growth.
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Goldman Sachs said over the weekend that fears of the U.S.-China trade war leading to a recession were growing and that it no longer expected a trade deal before the 2020 U.S. presidential election.
The yield on the 10-year Treasury tumbled below 1.66 percent as investors seek havens for their assets.
The spread between 10-year and 2-year Treasury notes, a closely watched section of the yield curve, has flattened to 6 basis points. That’s the narrowest since May 2007 and another possible harbinger of recession.
Tech shares such as Facebook, Amazon.com, Apple and Alphabet traded lower.
Shares of money center banks and regional banks also weighed on major equity averages.
CBS and Viacom are in the final stages of negotiating an all-stock merger.
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This week 11 members of the S&P 500 and two Dow components – computer networking powerhouse Cisco Systems on Wednesday and discount retailing giant Walmart -- will report on Thursday.
In fact, retail will be very much in focus in the coming week with three department store chains – Macy’s, Dillard’s and JC Penney reporting.
European benchmarks in London, Frankfurt and Paris all ended the day lower. In Asia, Shanghai and Hong Kong closed with declines. Tokyo was closed for a holiday.
On this week's U.S. economic calendar, traders will get a look at the impact the trade conflict with China is having. Reports are due on inflation, retail sales productivity and industrial production.
The Associated Press contributed to this article.