Technology and financial names led a broad sell-off in US stocks, as trade fears reverberated through Wall Street and sent yields on US government debt heading toward fresh multiyear lows.
Investors’ concerns over trade intensified on Monday after China allowed its currency to sink below a key threshold, heightening tensions with the US amid high-stakes trade negotiations. The move came after President Donald Trump announced last week that his administration would impose new tariffs on about $300bn in Chinese goods beginning next month.
Tech companies, which are considered particularly vulnerable to the trade spat, set the pace lower in the S&P 500. The sector was down about 3.8 per cent in midday trading in New York and eyeing its worst single-day decline since January.
Financials were on track for their worst day since December, as the sector fell 3 per cent on the prospect of weakening interest rates that could crimp bank profits. The yield on the benchmark 10-year Treasury note was down to 1.772 per cent, which would mark its lowest level since October 2016.
In tech, members of the so-called “Faang” group saw heavy losses. Apple was the worst of the bunch, falling more than 4 per cent to extend its recent pullback on Mr Trump’s tariff threat. Facebook, Netflix, Amazon and Google parent Alphabet posted losses ranging between 2 and 4 per cent, heaping pressure on the communications services sector, the S&P’s second-worst performer.
The Philadelphia semiconductor index tumbled 4 per cent. The index, which tracks 30 companies that make and distribute chips, has fallen from record highs with trade worries heating back up.
The tech-heavy Nasdaq Composite outpaced the S&P 500 in the Wall Street rout, slipping 3.2 per cent versus the broader index’s fall of 2.6 per cent.
All 11 sectors in the S&P saw red in Monday’s sell-off. Consumer discretionary, energy and industrials each dropped at least 2 per cent. Utilities, seen as a haven for equity investors, were the most resilient.