The major stories behind the market rout: PM Brief

** FILE ** In this July 22, 2005 file photo, a clerk at an foreign currency exchange desk at a hotel shows Chinese yuan banknotes in Shanghai, China. Beijing's currency has kept climbing Wednesday, June 18, 2008, with the official "parity rate" set at an all-time high against the U.S. dollar as U.S. and Chinese officials resumed talks centering on trade and other strategic issues. (AP Photo/Eugene Hoshiko, File)

U.S. stocks posted their largest one-day losses of 2019 on Monday after China suggested it was weaponizing its currency, in the latest salvo of the U.S.-China trade war.

Here were the main moves in the market, as of market close:

  • S&P 500 (^GSPC): -2.98%, or 87.31 points

  • Dow (^DJI): -2.9%, or 767.27 points

  • Nasdaq (^IXIC): -3.47%, or 278.03 points

  • 10-year Treasury yield (^TNX): -12.4 bps to 1.731%

  • U.S. dollar index (DX-Y.NYB): -0.64% to 97.45

  • U.S. dollar to onshore Chinese yuan rate (USD/CNY=X): +1.54% to 7.0457

Investors fled risk assets and flocked to havens including gold and the Japanese yen throughout the session. For U.S. equities, selling accelerated throughout the day, before stocks pared some losses in the last hour of trading. Tech stocks including Apple (AAPL) led declines, and the Dow shed as many as 961.63 points at the lows of the day.

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Top US-China trade war stories

'It doesn’t matter': China reacts to the devaluation of yuan: As China’s currency fell past the key point of 7 yuan per U.S. dollar (USDCNY=X) for the first time in 11 years, the country’s central bank spoke out, calling for calm and confidence. In a rare public statement, the People’s Bank of China (PBoC) published a series of statements on its website to communicate about yuan crossing the 7 level, in an effort to assure the market.

'Major violation': Trump reacts to China's tumbling yuan: President Donald Trump slammed China for allowing its yuan to weaken below a key level Monday morning. “It’s called ‘currency manipulation,” Trump said in a Twitter post. “Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Yuan devaluation has investors 'puking stocks': Many bulled up investors are likely to fill up the toilet bowl in the early going this week. And they can thank their own insane appetite for risk for that unwelcome, possibly extended exercise around the good ole’ porcelain throne. “It’s going to be a throwing up of stocks,” BNY Mellon chief strategist Alicia Levine told Yahoo Finance, when asked for her take on Monday’s vicious market downdraft.

The US-China trade war is ‘bigger than economics’: J. Kyle Bass, the CIO of Hayman Capital Management, says the trade war between the U.S. and China is "bigger than economics" as markets sink over the latest escalation between the two sides.

S&P 500 will plunge another 15% by the end of this year: strategistThe stock market surged during the first half of 2019, but the outlook is bleaker for the remainder of the year, according to John Higgins, Capital Economics’ chief markets economist. “We forecast that the S&P 500 (^GSPC) will fall by another 15% or so between now and the end of this year, as investors’ lofty expectations for earnings are dashed by continued sluggish growth in the U.S. and elsewhere, which won’t be helped by an escalating trade war,” Higgins wrote.

U.S. farmers are exasperated by latest trade war moves: 'Another nail in the coffin': Trade tensions between the U.S. and China are flaring once again, and American farmers continue to bear the brunt of the implications.

Why Trump's wrong to blast the Fed over China's 'currency manipulation': What role does the Fed actually play in controlling currency exchange rates? “Not much,” said Gary Richardson, a finance professor at the University of California at Irvine and the former official Federal Reserve historian. Congress has told the Fed that currency exchange rates are “not part of your job.”

This is probably the best time to hit consumer goods with tariffs: analyst: Consumers are likely going to get caught in the crosshairs of the ongoing trade war with China, as President Donald Trump’s latest tariff threat would cover more consumer goods imported from the country than previous rounds of tariffs. “The new tariffs are different in that they will be covering a lot more consumer goods that we import from China,” said Christopher Smart, chief global strategist & head of the Barings Investment Institute.

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