Investing.com - The Dow plunged Monday, giving up early gains amid doubts over whether a U.S.-China trade deal would spark a quick recovery in the global economy.
The Dow Jones Industrial Average fell 0.79%. The S&P 500 lost 0.37%, while the Nasdaq Composite fell 0.23%.
After months of uncertainty, the U.S. and China are close reaching a détente as soon as this month. But early investor euphoria quickly turned sour, sending stocks sharply lower, as investors questioned whether a trade deal would revive global growth as many headwinds loom, including Brexit, a potential U.S.-Europe trade war and a slowdown in China.
Some have argued that while a resolution to the trade war would boost global markets and prop up Chinese equities, it would do little do address some of Beijing's main economic woes, much of which has more to do with a rapidly modernizing economy than weakness in global trade.
Trade-sensitive stocks were mixed as Boeing (NYSE:BA) slipped, but Caterpillar (NYSE:CAT) ended the day higher.
Beyond trade, stocks were also pressured by weakness in financials and health care companies.
Banks fell as government bond yields, which trade inversely to prices, declined amid a flight to safety.
Goldman Sachs (NYSE:GS), Citigroup (NYSE:NYSE:C) and Morgan Stanley (NYSE:NYSE:MS) fell more than 1% as 10-Year Treasury yields ended the day lower.
Falling Treasury yields are seen as a headwind for banks, reducing their net interest margin, the difference between the interest income generated by banks and the amount of interest paid out to their lenders.