Major US stock indices fell markedly as investors fled risky assets amid concerns that a protracted trade war between the US and China could lead to a recession in the global economy.

An additional negative factor was the report that Hong Kong International Airport canceled all flights for the remainder of the day due to the growing protests. Since the beginning of June, protests have continued in Hong Kong that plunged the Asian financial center into the most serious crisis in decades and have been one of the biggest problems for Chinese leader Xi Jinping since coming to power in 2012.

In conditions of geopolitical uncertainty, investors preferred traditional safe haven assets such as the Japanese yen, gold and US government bonds. Yields on 10-year US Treasury bonds, which fell to their lowest level since 2016, continued to decline on Monday, dropping to 1.64%.

Market participants also continued to closely monitor the exchange rate of the Chinese currency against the US dollar. On Monday, the People’s Bank of China (NBK) set the average RMB exchange rate at 7.0211 per dollar, compared to 7.0136 on Friday. This, however, exceeded market expectations.

Last week, China allowed the yuan to fall below an important level of 7 per dollar for the first time since the global financial crisis in 2008. This happened after US President Trump threatened to introduce new tariffs on goods from China worth $ 300 billion from September 1. This step prompted the US Treasury to call China a currency manipulator.

Almost all DOW components completed trading in the red (28 of 30). Outsiders were the shares of The Goldman Sachs Group, Inc. (GS; -2.75%). Merck & Co., Inc. shares rose more than others (MRK, + 0.41%).

All S&P sectors recorded a decline. The largest decline was shown by the financial sector (-1.6%).

At the time of closing:

Dow 25,896.44  -391.00 -1.49%

S&P 500 2,882.69 -35.96 -1.23%

Nasdaq 100 7,863.41 -95.73 -1.20%

U.S. stock-index futures fell on Monday, pressured by worries that a drawn-out trade war between the United States and China could tip the world and U.S. economies into recession.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Advanced Micro (AMD) target raised to $44 at RBC Capital Mkts

Barrick Gold (GOLD) reported Q2 FY 2019 earnings of $0.09 per share, in line with analysts’ consensus estimate of $0.09.

The company’s quarterly revenues amounted to $2.063 bln (+20.5% y/y), missing analysts’ consensus estimate of $2.084 bln.

GOLD rose to $18.30 (+0.88%) in pre-market trading.