Major US equity indices quickly reversed early gains and drifted into negative territory during the opening hour of trade.
Monday’s trade kicked off on a positive note as investors took cues from a continued rebound in China’s markets, supported by hopes of economic stimulus, and rating agency Moody’s report to keep Italy’s sovereign rating outlook at stable.
However, fears about global growth and rising interest rates, which overshadowed last week’s strong quarterly earnings reports last week, now turned out to be one of the key factors behind the sudden change in the intraday trading sentiment.
Moreover, market participants also seemed reluctant to place any aggressive bets ahead of a busy week of third-quarter earnings reports, which might infuse a fresh bout of volatility, similar to what we saw last week.
Meanwhile, news that the Trump administration was studying a tax-cut for the middle-income group might extend some support and help limit deeper losses ahead of the pivotal congressional elections.
At the time of writing this report, the Dow Jones Industrial Average was down over 120-points to 25,325 and the broader S&P 500 Index lost almost 13-points to 2,755. Conversely, tech-heavy Nasdaq Composite outperformed the markets and fell around 14-points to 7,434.