U.S. stock benchmarks on Monday began third-quarter trade on a downbeat note as a parade of anxieties rattled investors during a holiday shortened week. The Dow Jones Industrial Average fell 185 points, or 0.8%, at 24,087, the S&P %00 index retreated by 0.7% at 2,700, while the Nasdaq Composite Index fell by 0.9% at 7,447. A Financial Times report on Sunday headlined simmering worries about clashes between the U.S. and trade partners in the European Union, China and North America. The FT report indicates that the EU has threatened $300 billion in fresh tariffs on U.S. products if President Donald Trump follows through on a threat of 20% levies targeting the trade bloc’s auto makers. Canadian retaliatory tariffs took effect Sunday, with those measures serving as a response to U.S. metals tariffs.
Separately, Axios reported that the Trump administration had crafted a draft bill that would declare America’s abandonment of World Trade Organization rules, which could offer Washington more latitude to enact more severe trade tariffs against its global partners. Meanwhile, markets also were focusing on political uncertainties in Germany, where Chancellor Angela Merkel and her interior minister were set to meet later Monday in a last attempt to resolve a spat in immigration in the country that could result in heightened instability in politics in Germany, the largest economy in the EU. U.S. markets will be closed on Wednesday in observance of Independence Day.