Stocks declined for the second straight session on Monday as investors assessed geopolitical risks and the impact of the U.S.-China trade war. The Dow dropped below the 26,000 level, after falling 391 points. The S&P 500 and the Nasdaq Composite both slipped 1.2%.
Treasury yields continued last week’s retreat raising concerns about the condition of the U.S. economy. The yield on the 10-year note slipped ten basis points to 1.63%, while the 30-year bond dropped 11 basis points to 2.14%, marking the lowest level since 2016. Wall Street analysts downgraded the probability that the U.S. and China will be able to reach a trade deal before the 2020 elections. In Hong Kong, political unrest also provided a headwind to equity markets, after protestors shut down a major airport overnight canceling all outbound flights. On the data front, the federal budget deficit widened by $183 billion in July, up 27% from this time last year.
All 11 S&P 500 sectors closed in negative territory with Financials declining nearly 2%. Shares of Bank of America are fell 2.4%, while Citigroup dropped 2.7%. In earnings, Sysco added 3.1% after the food distributor beat analyst earnings expectations. In other corporate news, BlackRock was off 2.3% after buying a majority stake in the parent company of Sports Illustrated, Authentic Brands. Tyson Foods slipped 0.1% after a fire partially destroyed a meat-packaging plant in Kansas.
In commodities, WTI crude gained 0.5% to $54.78/barrel. COMEX gold closed up 1.0% to $1,512.20/ounce hitting its highest level in six-years.