The Dow Jones Industrial Average plunged more than 600 points Monday as investors sought shelter from an escalating trade war between the U.S. and China.
The selling was widespread and heavy, handing the benchmark S&P 500 index its biggest loss since January. The sell-off extended the market’s slide into a second week. The losses so far in May have now erased the market’s gains from April.
Technology companies, which do a lot of business with China, led the way lower. Chipmakers were among the biggest decliners. Apple also took heavy losses, tumbling 5.8%. Farming equipment maker Deere drove losses in the industrial sector.
The Dow dove 617.38 points, or 2.4%, to 25,324.99. Earlier, it was down 719 points. Apple and Boeing were the Dow’s biggest decliners. Both companies get a significant amount of revenue from China and stand to lose heavily if the trade war drags on. Boeing slid 4.9%.
The broader S&P 500 index fell 69.53 points, or 2.4%, to 2,811.87. The index is coming off its worst week since January, though it’s still up sharply for the year. The Nasdaq, which is heavily weighted with technology stocks, slid 269.92 points, or 3.4%, to 7,647.02, its worst drop of the year.
The Russell 2000 index of small company stocks lost 49.99 points, or 3.2%, to 1,523.
China on Monday announced tariff increases on $60 billion of U.S. imports, particularly farm products like soybeans. The price of soybeans slid 0.8% to $8.04 a bushel. They were trading around $9 a bushel last month and are now at their lowest price since December 2008. The falling price has put pressure on U.S. farmers.
Technology stocks took the heaviest losses Monday. Chipmakers Microchip Technology dropped 6.3% and Advanced Micro Devices lost 6.2%.
Some of the biggest chipmakers in the U.S. lean heavily on China for their sales, making them particularly vulnerable to the worsening tensions between the two countries. The list of chipmakers that get at least one-quarter of their revenue from China include: Qualcomm (65, Micron (57%), Texas Instruments (43%), Microchip Technology (29%), Intel (26%) and Xilinx (25%), according to FactSet Research.
Bank stocks also fell sharply. Bank of America dropped 4.5% and JPMorgan Chase fell 2.7%.
Safe-play holdings were the only winners as traders sought to reduce their exposure to risk. Utilities were the only sector to notch a gain. Prices for U.S. government bonds, which are considered ultra-safe investments, rose sharply, sending yields lower. The yield on the 10-year Treasury fell to 2.40% from 2.45% late Friday.
Elsewhere in the market, generic drug developers slumped after many of them were accused of artificially inflating and manipulating prices. Teva, which was specifically mentioned, sank 14.8%. Mylan skidded 9.4%
Ride-sharing company Uber tumbled another 10.8% on its first full day of trading following its rocky debut on the stock market Friday. The stock had priced at $45 at its initial public offering. It closed at $37.10.
Gold mining companies rose as the price of gold, another safe-play asset, rose 1.1% to $1,301.80 an ounce. Newmont Goldcorp rose 2.5%.
Energy futures finished mostly lower. U.S. crude dropped 1% to settle at $61.04 per barrel. Brent crude, the international standard, closed 0.6% lower at $70.23 per barrel.
Wholesale gasoline slid 1.3% to $1.96 per gallon. Heating oil lost 0.6% to $2.04 per gallon. Natural gas inched 0.1% higher to $2.62 per 1,000 cubic feet.
Silver slipped 0.1% to $14.78 per ounce and copper rose 2% to $2.72 per pound.
The dollar fell to 109.34 Japanese yen from 109.90 yen on Friday. The euro held steady at $1.1231.