The Dow eked out the smallest of gains on Monday, finishing 5 points higher, after new threats of tariffs and retaliation once again sent shock waves across global financial markets.
Stocks had a mixed day as the market digested the most recent trade-related developments. And reports that suggested a possible regulatory crackdown on the tech industry drove down the Nasdaq Composite.
The Nasdaq ended the day 1.6% lower, marking its worst day in three weeks, according to Refinitiv. The S&P 500 fell 0.3%.
Asian stocks closed Monday’s session lower, while European stocks recovered from earlier weakness.
President Donald Trump threatened to impose tariffs on Mexican imports on Friday, sending stocks firmly lower, along with the Mexican peso. Also Friday, Trump announced India would be removed from a special trade program.
Over the weekend, Chinese authorities said the country would “not back down” in the trade spat with the United States, and blamed Washington for the negotiation breakdown. Last week, Beijing signaled that it could blacklist foreign companies from its domestic market.
Amid the new woes, both China and Mexico showed some willingness to return to the negotiating table with the United States.
“The escalation of trade wars beyond China and lack of US fiscal support this year suggests that US exceptionalism could be at risk,” wrote Mark McCormick, global head of FX Strategy at TD Securities, in a note. “Though we think the recent warning shot towards Mexico could be resolved, the road ahead on the global trade front is likely to remain challenged until the G20 later this month.”
Leaders of the group of 20 nations will meet in Osaka, Japan, in late June.
Stocks around the world have fallen amid the trade uncertainty since the start of the year. Last week, the Dow logged its longest weekly losing streak since June 2011. Nevertheless, the Dow is still up more than 6% this year, and the S&P is still nearly 10% higher.
In May, the Dow and the S&P each fell 7%, marking their worst performance since December, while the Nasdaq fell 8%, recording its worst May performance since 2010.