(Reuters) - U.S. stocks fell on Monday as a drop in oil prices dragged energy stocks lower, while the risk of an escalating tariff war between Washington and its trading partners continued to weigh on the broader market sentiment.
The United States’ decision to impose tariffs on $34 billion worth of Chinese goods will come into effect on July 6, posing threats of a similar response from Beijing.
Meanwhile, the European Union has threatened to hit the United States with almost $300 billion in retaliatory tariffs, while Canada has vowed to slap punitive measures on $12.63 billion worth of American goods in response to U.S. steel and aluminum tariffs.
“I think it’s (the market’s decline) a continued reaction to the trade policy situation,” said Brad McMillan, chief investment officer for Commonwealth Financial.
“We see the United States announce certain unilateral actions, then we’re starting to see some of the responses, and I think the markets are getting increasingly worried.”
Nine of the 11 main S&P 500 sectors were trading lower. They were led by a 1.38 percent fall in the energy index .SPNY on the back of a drop in crude prices as supplies from Saudi Arabia and Russia rose. [O/R]
At 12:04 a.m. EDT the Dow Jones Industrial Average .DJI was down 128.13 points, or 0.53 percent, at 24,143.28, the S&P 500 .SPX was down 11.04 points, or 0.41 percent, at 2,707.33 and the Nasdaq Composite .IXIC was down 19.18 points, or 0.26 percent, at 7,491.12.
The three major indexes however pulled back from steeper declines at the start of the session as technology stocks .SPLRCT pared their losses and was last down 0.13 percent.
