Tech, trade tensions bring market drop

Technology companies pulled stock indexes lower, while the dollar dropped as investors eyed a growing list of global concerns. Treasuries fell.

The tech-heavy Nasdaq indexes led losses Monday, while small caps gained after President Donald Trump on Sunday threatened more tariffs on Chinese goods. The S&P 500 deepened declines following its biggest weekly retreat since March, holding near the key 200-day moving average. Bank of America Corp. dropped after posting quarterly results, while Harris Corp. and L3 Technologies Inc. surged on the announcement of a merger.

The dollar touched a two-week low against peers, while the 10-year Treasury yield traded around 3.15 percent after U.S. retail sales in September fell short of analysts’ estimates. West Texas crude advanced amid tensions between Saudi Arabia and the U.S. over the disappearance of a prominent journalist. Gold headed toward its fourth gain in five days.

“The overall trade tensions and geopolitical tensions with China leads to more worries about global growth and about general growth in the marketplace. That certainly impacts tech,” Chris Gaffney, president of world markets at TIAA Bank, said in an interview. “We’re not seeing a follow-through on the big recovery we saw on Friday. Instead, we’re seeing investors stay on the sidelines today. They’re trying to figure out if this is the start of a longer-term correction or just a healthy move lower setting up for a longer recovery.”

While global tensions were on full display this weekend, with the IMF warning of more market volatility and U.S.-China trade war rhetoric increasing, investors are also trying to gauge the direction of the American economy and earnings from last quarter that are starting to roll in. Anything hinting of a slowdown or stronger growth that could impact the pace of Federal Reserve rate hikes will push markets around.