U.S. stocks fell Monday after escalating protests in Hong Kong weighed on already-dampened investor sentiment.
Losses accelerated into the final hour of trading as U.S. Treasury yields tumbled. Monday marked the ninth consecutive trading session of an at least 1% intraday move in the S&P 500.
Here were the main moves in the market by the end of regular trading.
S&P 500 (^GSPC): -1.23%, or 35.96 points
Dow (^DJI): -1.49%, or 391 points
Nasdaq (^IXIC): -1.2%, or 95.73 points
10-year Treasury yield (^TNX): -9.2 bps to 1.642%
Gold futures (GC=F): +0.99% to $1,523.40 per ounce
U.S. dollar to onshore Chinese yuan rate (CNY=X): -0.0496% to 7.0577
Hong Kong International Airport – one of the busiest transportation centers in the world – canceled all departures on Monday after thousands of anti-government protesters flooded its terminal building. Monday’s cancellations impacted all departures after 5:50 a.m. ET as well as some arrivals, for a total of more than 100 affected flights.
The move followed more clashes over the weekend between riot police and the pro-democracy activists, who have been protesting for more than two months in opposition of now-tabled legislation that would have allowed extradition from Hong Kong to mainland China.
The disruption weighed on global markets as investors considered the possibility of further unrest in Hong Kong, a hub for international business. The Hang Seng index slid more than 100 points, of 0.44%.
Meanwhile, angst over unsettled trade tensions between the U.S. and China remains elevated.
Investors continue to monitor the strength of the yuan versus the dollar, with China now designated a currency manipulator by the U.S. Treasury. On Monday, the People’s Bank of China (PBOC) set its yuan fixing at 7.0211 per dollar, marking the third consecutive session with an official midpoint past the psychological 7-per-dollar level. However, this was a stronger rate than expected by consensus economists.
Tariffs also remain a focus, and have been a recurring point of concern companies have underscored in second-quarter results. The number of S&P 500 companies mentioning tariffs during their second-quarter earnings calls during this point in the reporting season is 41% higher than the number discussing tariffs at this time in the first quarter, according to an analysis by FactSet. Specifically, 124 companies had discussed tariffs on earnings calls as of Friday, versus 88 at the same point in the first quarter of this year, FactSet found.
“It is interesting to note that the number of S&P 500 companies citing ‘tariffs’ had declined for three straight quarters until Q2 2019,” FactSet analyst John Butters wrote in a note. “But, based on the numbers for Q2 2019, it appears concerns about tariffs may be back on the rise for S&P 500 companies.”
And with no visible end in sight for the U.S.-China trade war, economists have shifted their expectations to see a further dampening to domestic output due to trade sparring.
Goldman Sachs economists on Monday said they now see a peak cumulative drag on GDP of 0.6%, due in part to an expected decrease to corporate capital expenditure as a result of business uncertainty over the policy outlook. The economists said they now expected Q4 GDP growth of 1.8% quarter-over-quarter, down 0.2 percentage points from their prior estimate.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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