Every sector within the S&P 500 declined on Monday.
"It appears to me that the USA and China are pulling further apart on trying to reach an agreement", said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.
The flight from risk sent gold prices up 1%, hovering at a more than six-year high.
The Bloomberg Dollar Spot Index climbed 0.1%.The onshore yuan decreased 0.1%.The euro dipped 0.2% to $1.1191.The Hong Kong dollar advanced less than 0.05% to 7.846 per US dollar.The British pound declined 0.1% to $1.2061. -China trade war would push the global economy into recession sapped risk appetite. -China trade war leading to a recession were growing and that it no longer expected a trade deal before the 2020 USA presidential election.
"I don't think the trade war is going to end any time soon, it could drag on into 2020. then you have geopolitical concerns", said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada. Trump's pledge to tax the remaining $300 billion worth of Chinese imports goes into effect on September 1. The narrowing of the yield curve kept gains in check, as the recession signal emanating from the bond market grew louder. Bank of America fell 2.5% and Citigroup gave up 2.9%. Credit card issuer Synchrony Financial slid 3.9% and Capital One Financial dropped 2.3%. Symantec dropped 6.2%, Nektar Therapeutics slumped 10.8% and Tractor Supply fell 4.6%. Traders usually seek the shelter of dividend-friendly utilities and bonds when they want a more secure place to put their money because of concerns over economic growth. Futures indicated markets will open lower in Tokyo when traders return from a holiday Monday, as well as in Sydney.
The S&P 500 posted 23 new 52-week highs and 22 new lows; the Nasdaq Composite recorded 42 new highs and 170 new lows.
Adding to the dim prospects for a US-China trade deal and a steep drop in US Treasury yields was mounting unrest in Hong Kong, where pro-democracy protesters shut the city's airport.
Intensifying protests in Hong Kong and political instability in Argentina and Italy also hurt investor sentiment.
Meanwhile, Argentina's peso sank on Monday and its equities crashed after voters turned on the president in a primary vote.
Investors are facing a relatively slow week as far as economic reports and corporate earnings. The Labor Department will release its consumer price index for July on Tuesday and Commerce Department will release last month's retail sales results on Thursday.
Second-quarter reporting season is approaching the finish line, with 452 of the companies in the S&P 500 having reported. Brent crude, used to price global oils, declined 19 cents to $58.38 per barrel in London.
Gold rose $8.70 to $1,505.30 per ounce, silver rose 14 cents to $17.04 per ounce and copper was unchanged at $2.58 per pound.
CURRENCY: The dollar gained to 105.57 yen from Monday's 105.30 yen. The euro declined to $1.1188 from $1.1214.