Stocks recovered to end the day above session lows as China confirmed it had no plans to walk away from trade talks with the U.S. set for later this week, despite President Donald Trump threatening to hike tariffs on Beijing.
The Dow Jones Industrial Average fell 0.26%, or 68 points after falling 471 points at the open. The S&P 500 lost 0.44%, while the Nasdaq Composite fell 0.50%.
Sentiment on U.S.-China trade turned positive after China said it was preparing to send its trade team to Washington for the trade talks, even as Trump warned that tariffs on $200 billion worth of Chinese goods could more than double to 25% from 10% on Friday.
"(We had hoped) to make progress in our trade talks and (we) hope the U.S. side can work together with us and move in the same direction so we can achieve a deal that can benefit both sides," Foreign Ministry spokesman Geng Shuang said on Monday.
"Everyone in China and abroad is very concerned about the next round of talks, and we are also learning about the relevant changes," he added. "The Chinese delegation is preparing to go to the U.S. for the negotiations."
The confirmation from China that trade would continue, fueled speculation on Wall Street that Trump's threat was a ploy to ramp up pressure on China in a bid secure the upper hand in trade talks, which are nearing the final stages.
Boeing (NYSE:BA) and Caterpillar (NYSE:CAT), bellwethers of international trade, ended the day more than 1% lower after plummeting about 2.8% and 3.4%, respectively.
On the earnings front, Tyson Foods (NYSE:TSN) bucked the trend after reporting better-than-expected earnings and a rosier outlook on the expectations that African swine flu hitting Chinese meat could boost its business. Its shares climbed 2.6%.
Energy stocks were one of the few sectors to end the day in the green as oil prices staged a turnaround as the United States deployed bombers and a carrier strike group to the Middle East in response to Iranian threats, stoking tensions in the region.
Anadarko Petroleum (NYSE:APC) also propped up energy after rising 3.8%, after Occidental Petroleum (NYSE:OXY) on Sunday, sweetened its deal for the oil and gas driller, offering 78% cash and 22% stock, compared with its earlier 50-50 cash-and-stock proposal.
Top S&P 500 Gainers and Losers Today:
Centene Corp (NYSE:CNC), Coty (NYSE:COTY) and Cigna (NYSE:CI) were among the top S&P 500 gainers for the session.
Affiliated Managers Group (NYSE:AMG), IPG Photonics (NASDAQ:IPGP) and Stanley Black & Decker (NYSE:SWK) were among the worst S&P 500 performers of the session.
