The rout in the stock market is growing at midday Monday

U.S. stocks fell sharply Monday, in the latest example of heavy intraday volatility driven by both uncertainty surrounding trade policy and weakness in the large-capitalization technology and internet sectors.

The day’s weakness was broad-based, with all 11 S&P 500 sectors dropping and eight of them shedding more than 2%. There was particular weakness in the technology and consumer-discretionary sectors, which took the Nasdaq into negative territory for the year and brought it within striking distance of closing in correction territory, defined as a 10% drop from a peak.

In an ominous sign for where equities may be headed, the S&P 500 for the first time since June 2016, after the United Kingdom voted to leave the European Union. That closely watched technical level — which the Dow nearly closed below as well — is seen as a gauge of the long-term momentum in an asset.

What are the main benchmarks doing?

The Dow Jones Industrial Average fell 458.92 points, or 1.9%, to 23,644.19. Losses were widespread in the blue-chip average, with only one of the 30 components, UnitedHealth Group Inc. , ending in positive territory. All 30 components , a sign that short-term momentum may be trending to the downside.

The S&P 500 lost 59 points to 2,581, a decline of 2.2%. Only 13 of the S&P’s components ended in the green Monday.

The Nasdaq Composite Index was down 193 points, or 2.7%, to 6,870. With Monday’s tumble, it is now down 0.5% for 2018. The tech-heavy index is also near correction territory, defined as a drop of at least 10% from a peak. While such drawdowns are common, historically speaking, the Nasdaq hasn’t had a correction since February 2016.

The Nasdaq-100 Index  fell 2.9% and all of its components ended in negative territory. The index ended in negative territory for the year.

The day represented a rough start to the second quarter, but it was merely the latest example of heavy volatility, which has been plaguing markets for the past several weeks. The Dow and S&P in the first quarter, and the pair, along with the Nasdaq, logged steep declines for March. Historically, April has been , including the strongest of the year for the Dow.

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What’s driving markets

Trade policy continued to be in the forefront in the minds of investors after China , including a 25% penalty slapped on U.S. pork and 15% on fruit. The news means China has made good on its threat to retaliate against the Trump administration’s tariffs on Chinese steel and aluminum imports.


Technology and internet stocks also remained in focus, as the sector — still one of the stronger-performing of the year — has undergone heavy volatility. Facebook Inc. , Tesla Inc. and Amazon Inc.  in particular have all seen steep moves of late, and they all tumbled in Monday’s session.

Trump increased his attack on Amazon’s business practices on Saturday, tweeting how the U.S. Postal Service , a statement others have contradicted. Amazon fell 5.2% on Monday; the stock is down more than 6% over the past month.


What data are in focus?

The IHS Markit manufacturing purchasing managers index hit a three-year high of 55.6 in March, up from 55.3. The for the same month came in at 59.3, compared with a previous monthly reading of 60.8. A reading of 50 or above indicates improving conditions.

A reading on construction spending, meanwhile, in February to a seasonally adjusted annual rate of $1.27 trillion, the Commerce Department reported Monday. Economists polled by MarketWatch had expected growth of 0.3%, compared with an unchanged reading in January.

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What are strategists saying?

“Today’s weakness has everything to do with China’s announced tariffs. Even though they were quite small, there’s a fear that this could escalate. We don’t know if this could be the end as far as retaliation goes, but it seems like the trade issue is escalating into bite and not just bark,” said Hank Smith, chief investment officer at Haverford Trust Co.

Smith also pointed to the weakness in tech and internet stocks as a main focus for investors. “You need to keep in mind that these stocks have had tremendous upward moves over the past year, but whenever the specter of Washington shines on an industry, you typically don’t get good performance. That’s what we’re seeing right now.”

Which stocks are in focus?

Tesla fell 5.1% after the National Transportation Safety Board said it was “unhappy” that the electric-car maker . Meanwhile, Tesla CEO Elon Musk about the company going bankrupt. That is after shares sank around 22% in March. Despite the recent weakness, one analyst said the “perfect storm” of bad news .

Humana Inc.  rose 4.4% after The Wall Street Journal reported late Thursday that Walmart Inc. . Walmart, a Dow component, fell 3.8%.

Alkermes PLC  sank 22% after the company from the Food and Drug Administration regarding its new drug application for ALKS 5461, a treatment for major depressive disorder. Alkermes management said the FDA , and that they weren’t clear on what those objections even were.

Among the notable decliners of the tech sector, Facebook Inc. fell 2.8% while Google-parent Alphabet Inc.  was down 2.4%. Microsoft Corp.  lost 3% and Apple Inc.  was down 0.7%. Intel Corp.  fell 6.1%.

Netflix Inc.  , a consumer-discretionary stock that often trades on technology trends, sank 5.1%, though it remains up more than 40% thus far this year.


What are other markets doing?

European stocks were closed for Easter Monday. Asian stock markets .

Oil prices  were . rose, while the ICE U.S. Dollar Index 0.2% at 89.89.