Major US stocks fell significantly as fears of a worsening US-China trade war and slowing global economic growth intensified after Beijing devalued the yuan against the dollar to its lowest level since 2008 in response to Washington’s latest threat to introduce new tariffs on Chinese imports.

China allowed the national currency to break the important mark of 7 yuan per dollar on Monday for the first time in more than ten years, and US President Donald Trump called the move a “serious violation.” In addition, Bloomberg reported that China asked state-owned companies to suspend US agricultural imports.

These steps followed US President Donald Trump's statement last week that Washington intends to introduce a new 10 percent tariff on Chinese imports of $ 300 billion worth of Chinese goods on September 1. Trump's threats came after US and Chinese officials discussed trade issues. at the beginning of last week, when the two countries tried to resume negotiations.

The increasing uncertainty prompted investors to buy government bonds, gold and other safe assets such as the Japanese yen. The yield on 10-year US Treasury bonds fell to 1.73% and reached its lowest level since November 2016. Gold futures rose 1.1%.

At the same time, mixed macroeconomic reports failed to support the market. Data provided by the Institute for Supply Management (ISM) showed that the index of business activity in the US services sector fell in July to 53.7 points compared to 55.1 points in June. The latter value was the lowest since August 2016. Analysts predicted that the indicator would rise to the level of 55.5 points. In contrast, the Markit business activity index for the service sector showed growth to 53 points in July from 51.5 points in June against the economists' forecast of 52.2.

All DOW components recorded a decrease (30 out of 30). Outsiders were Apple Inc. (AAPL; -5.05%).

All S&P sectors completed trading in the red. The largest decline was shown by the technology sector (-3.5%).

At the time of closing:

Dow 25,717.74 -767.27 -2.90%

S&P 500 2,844.75 -87.30 -2.98%

Nasdaq 100 7,726.04  -278.03 -3.47%