Tariffs and trade wars continue to weigh on Wall Street

E-mini Dow Jones Industrial Average

Weekly June E-mini Dow Jones Industrial AverageMore

Technology (+0.3%) was among the top-performing sectors, with chipmakers setting the pace amid reports that Intel might look to acquire Broadcom, which is itself in pursuit of a deal for Qualcomm.

The Dow Jones industrial average fell on Monday as investors anxious a trade war could develop after President Donald Trump implemented tariffs on steel and aluminum imports.

In early trading, Germany's DAX rose 0.8 percent to 12,446.46 and France's CAC 40 added 0.4 percent to 5,297.83.

Oclaro (OCLR.O) jumped 25 percent and was the most traded stock premarket after laser and optical fiber specialist Lumentum Holdings (LITE.O) said it would buy the optical components producer for $1.7 billion.

As the impact from higher steel prices undermined industrials, the Dow drifted off its opening highs and carved into Friday's 400+ point gain. The Treasury Budget reported a -$215.2 billion deficit in February. That helped to dampen inflation concerns that triggered the market's swoon. The S&P 500 was also in the red, although the Nasdaq closed higher as a result of outsized gains in Tesla ( TSLA ) and Micron Technologies (MU).

TRADE WAR?: China's commerce minister said Beijing wants to resolve disputes with Washington through negotiations but vowed to defend Chinese interests.

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Persistent concern of a global trade war, after President Donald Trump implemented 25% tariff on steel imports and 10% on aluminium imports to the USA, also continued to weigh on investor sentiment.

The Treasury Budget was the only leading report on the economic calendar Monday.

In corporate news, shares of Neflix (NFLX) retreated from its record high at the open and dropped 2% from Friday's close after short-seller Andrew Left from Citron Research tweeted to short the stock "back to $300", a 10% correction from today's high. "Any initial enthusiasm may ease as investors digest further trade war rhetoric", said McCarthy.

Investors were also cheered by last week's surprise news of a summit between President Donald Trump and North Korean leader Kim Jong Un, expected to take place by the end of May.

The stock rose as much as 2.5 percent, but later traded down 1 cent to $38.53. Brent crude, used to price global oils, shed 22 cents to $65.27 per barrel in London. Tokyo's Nikkei 225 added 1.6 percent and the Hang Seng of Hong Kong jumped 1.9 percent. It surged $1.88 the previous session to $65.49. The euro rose to $1.2310 from $1.2313.

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