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Major equity indexes in the United States started the day sharply lower on Monday as President Trump’s threat about lifting the tariff rate on Chinese imports to 25% from 10% by the end of this week forced investors to move away from risk-sensitive assets. The CBOE Volatility Index, Wall Street’s so-called fear gauge, is up more than 25% on the day to reflect the flight-to-safety. As of writing, the Dow Jones Industrial Average was down 0.7% on the day while the S&P 500 and the Nasdaq Composite were both down around 1.5%.

Among the 11 major S&P 500 sectors, which are all in the negative territory in the early trade, trade-sensitive Industrials, Materials, and Technology indexes are all losing nearly 2% on the day. On the other hand, the defensive Utilities index is virtually unchanged.  

Although the latest market chatter suggested that some Chinese officials were still set to travel to Washington on Wednesday, it’s not yet clear if the planned high-level meetings will take place later this week. Headlines surrounding the U.S.-China trade conflict are likely to continue to drive the stock markets’ trading action.