After turning in a lackluster performance to close out the previous week, stocks showed a substantial move to the downside during trading on Monday. The major averages all moved sharply lower, with the Dow adding to the steep loss posted last Thursday.

The major averages climbed off their worst levels going into the end of the day but remained firmly negative. The Nasdaq plunged 415.55 points or 2.6 percent to 15,870.90, the Dow tumbled 971.82 points or 2.5 percent to 38,170.41 and the S&P 500 (SPI:SP500) slumped 124.50 points or 2.4 percent to 5,158.20.

The sell-off on Wall Street came amid lingering concerns about a global trade war as traders await signs of progress from President Donald Trump’s trade talks.

Potentially adding to the worries, China has threatened to retaliate against any countries that reach a trade deal with the U.S. at the expense of China’s interests.

A spokesman for China’s Ministry of Commerce was asked to respond to reports the Trump administration is preparing to put pressure on other countries to restrict trade with China in exchange for U.S. tariff exemptions.

“If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner,” the spokesman responded, according to a Google translation. “China is determined and capable of safeguarding its own rights and interests.”

Trump’s continued attacks on Federal Reserve Chair Jerome Powell added to the negative sentiment, with the president calling him “Mr. Too Late” and “a major loser” in a post on Truth Social.

In the same post, Trump also claimed there will be “almost no inflation” but warned “there can be a SLOWING of the economy” unless Powell lowers interest rates.

Trump also called on the Fed to lower rates in a separate post last week, declaring, “Powell’s termination cannot come fast enough!”

Sector News

Networking stocks showed a substantial move to the downside on the day, resulting in a 3.2 percent plunge by the NYSE Arca Networking Index.

Significant weakness was also visible among natural gas stocks amid a steep drop by the price of the commodity, dragging the NYSE Arca Natural Gas Index down by 3.0 percent.

Airline, oil service and software stocks also saw considerable weakness, moving notably lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan’s Nikkei 225 Index slumped by 1.3 percent, while China’s Shanghai Composite Index rose by 0.5 percent.

Meanwhile, the major European markets were closed on the day in honor of Easter Monday.

In the bond market, treasuries fluctuated over the course of the session before closing firmly negative. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.2 basis points to 4.405 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to any trade developments.

Earnings news from companies like 3M (NYSE:MMM), Halliburton (NYSE:HAL), Kimberly-Clark (KMB), Lockheed Martin (LMT) and Verizon (VZ) may also attract attention.

SOURCE: RTTNEWS

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