Stocks sank again Monday on fears that the Trump administration will escalate its trade dispute with China by imposing tariffs on all remaining goods the United States imports from that nation.
The declines came during another dizzying day of trading. The Dow Jones industrial average swung between a gain of 352 points and a loss of 566 before closing down 245.39 points, or 1%, at 24,442.92.
Bloomberg News reported that the Trump administration will put tariffs on the rest of the United States’ imports from China if the two nations’ presidents don't make substantial progress in easing the trade dispute next month. Meanwhile, corporate earnings season is in full swing, and a number of big companies have warned that tariffs already in place have raised their costs.
Technology and internet companies, industrial firms and retailers took steep losses after the Bloomberg report as Wall Street's recent bout of volatility continued.
The Standard & Poor’s 500 index has dropped 9.4% in October and is on track for its biggest monthly loss since February 2009 — right before the market hit its lowest point during the 2008-09 financial crisis.
The S&P 500 index fell 17.44 points, or 0.7%, to 2,641.25 on Monday. The tech-heavy Nasdaq composite slid 116.92 points, or 1.6%, to 7,050.29. The Russell 2000 index of smaller-company stocks fell 6.51 points, or 0.4%, to 1,477.31.
Stocks have fallen steeply since early October, breaking a long period of relative calm over the summer. Trading has been especially volatile the last few days.
Among industrials, Boeing sank 6.6% to $335.59. Some early gains for tech and internet stocks also faded. Microsoft ended down 2.9% at $103.85. Alphabet, Google's parent company, sank 4.5% to $1,034.73.
Amazon.com dropped 6.3% to $1,538.88. The online retailer also tumbled Friday after it reported weak sales and gave a lower-than-expected revenue estimate for the quarter that includes the holiday shopping season. Its stock traded above $2,000 a share in early September and has dived 24.5% since then.
The S&P 500, the main benchmark for the U.S. stock market, has fallen 9.9% from its Sept. 20 record high. The Nasdaq has dropped 13% from its Aug. 29 record high.
For most of this year, investors have remained hopeful that the United States and China would work out their disagreements on trade policy and that many of the tariffs would be reduced or eliminated. But in recent weeks they have lost some of their confidence. Their fear that the dispute will last longer and have bigger effects has contributed to the market's tumble.
The effects of higher tariffs could be especially severe for tech firms, which make many of their products in China, and for industrial companies, which are already paying higher prices for metals. The United States and China are the world's largest economies and their trade relationship is the world's largest, so the higher taxes on imports could also slow global economic growth and increase inflation.
Although most tech firms fell Monday, open-source software company Red Hat soared 45.4% to $169.63 — reversing its losses from earlier this year — after IBM agreed to buy it for $34 billion in stock. IBM Chairman and CEO Ginni Rometty said the deal will make IBM the world's biggest hybrid cloud provider, meaning it will offer companies a mix of on-site, private and third-party public cloud services. IBM fell 4.1% to $119.64.
The prospect of reduced barriers to trade helped automakers. Car companies rose after Bloomberg News reported that regulators in China intend to propose cutting the tax on imported cars to 5% from 10%. The U.S.-China trade war has hurt sales, and that slowdown is one of the factors that have damaged car company stocks this year.
Ford climbed 3.3% to $9.28. Auto parts retailer BorgWarner advanced 4% to $39.56. After Cooper Tire & Rubber reported a bigger third-quarter profit than analysts expected, its stock surged 21.4% to $30.89.
Germany's DAX rose 1.2% as Volkswagen, Daimler and BMW made big gains. Italy's FTSE MIB index rose 1.9% after Standard & Poor's did not downgrade its credit rating. Italy's new government plans to ramp up spending, and European Union leaders have demanded it change its plans.
Mexico's stock index dropped 4.2% after President-elect Andres Manuel Lopez Obrador said he will respect the result of a referendum that rejected a partly built new airport for Mexico City. He said 70% of voters opposed the $13-billion project.
Brazil's Bovespa rose in morning trading after far-right politician Jair Bolsonaro was elected president, but it later ended down 2.2%. Stocks climbed earlier this month after Bolsonaro led the previous round of voting, as investors preferred him to leftist parties.
Bond prices slipped. The yield on the 10-year Treasury note rose to 3.08% from 3.07%.
The price of U.S. crude oil fell 0.8% to $67.04 a barrel in New York. Brent crude, used to price international oils, fell 0.4% to $77.34 a barrel in London.
Wholesale gasoline rose 0.5% to $1.82 a gallon. Heating oil fell 0.8% to $2.28 a gallon. Natural gas was unchanged at $3.19 per 1,000 cubic feet.
Gold fell 0.7% to $1,227.60 an ounce. Silver fell 1.8% to $14.44 an ounce. Copper was little changed at $2.74 a pound.
The dollar rose to 112.35 yen from 111.85 yen. The euro fell to $1.1390 from $1.1412.