Stocks sank Monday as hope for a trade deal with China flagged and political unrest in several areas of the world roiled markets, stoking fears of another global economic recession in the near future.
Conservative incumbent Mauricio Macri unexpectedly finished a distant second in Argentina’s first round of presidential voting Sunday to left-leaning opponent Alberto Fernández, hurting his chances of winning a second term in October and sparking fears of economic turmoil ahead for the country. Then, on Monday, pro-democracy protests in Hong Kong reached a head, causing Hong Kong International Airport, one of the world’s most heavily trafficked travel hubs, to shut down and cancel all flights after about 5,000 protesters swarmed it.
Meanwhile, the global economy has slowed, and trade tensions with China have escalated in recent weeks after President Trump raised tariffs on $200 billion of Chinese imports in May.
Bank of America offered a bleak outlook on Friday, saying in a note to clients that it sees about a one in three chance of a recession hitting some time in the next year, according to recent data and events. Goldman Sachs Group echoed that sentiment over the weekend, writing in a memo to clients that it no longer expects a trade deal between China and the U.S. to materialize before the 2020 presidential election.
By 1 p.m. Monday, the Dow Jones Industrial Average had dropped 280 points, the S&P 500 had dropped 24 points, and the NASDAQ Composite Index had dropped 55 points.