Stocks fell on the first trading day of the month and the quarter as a decline in Amazon shares put pressure on the broader tech sector on Monday.
The Dow Jones industrial average traded 615 points lower, with a decline in Walmart offsetting gains in UnitedHealth. The S&P 500 pulled back 2.7 percent and entered correction territory, with tech falling 3 percent. The index also dropped below its 200-day moving average, a key technical level. The Nasdaq composite dropped nearly 3 percent — also entering correction — as Amazon declined 5.3 percent.
“The market leaders are under pressure,” said Marc Chaikin, CEO of Chaikin Analytics. “It’s a situation where the proven winners for the past few years are faltering.” When that happens, “there is a negative psychological sense in the market.”
The e-commerce giant’s stock fell after President Donald Trump tweeted on Saturday that Amazon was scamming the U.S. Postal Service, adding the service loses “billions of dollars” delivering packages for the e-commerce giant.
Amazon has been one of the best-performing stocks over the past year, rising nearly 64 percent in that time period.
Trump tweeted again about Amazon on Monday, saying: “Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed.”
Tech shares continued to be under pressure on Monday, with shares of Facebook, Netflix and Alphabet all trading sharply lower. Last month, concerns over how Facebook handles data collected from its users sent the entire sector lower. Facebook dropped 10.4 percent in March.
Snap’s stock also fell 7.8 percent Monday after MoffettNathanson reiterated its sell rating, noting it found students were “uniformly disapproving” of the company’s app redesign.
Traders also fretted over the possibility that a trade war may be brewing.
China announced overnight Monday it had implemented tariffs on 128 types of U.S. imports. The goods hit with the charges the list of products proposed by Beijing in March and comes as a direct response to Trump signing off on tariffs on imported steel and aluminum last month. China said in March that those goods had an import value of $3 billion in 2017.
Trade worries also remained after Trump linked his proposal to build a border wall between the U.S. and Mexico to ongoing NAFTA negotiations between the two countries. In a tweet Sunday, Trump said: “They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!”
“The new bearish narrative is that tariffs implemented by the Trump administration will spur a global trade war that would spiral the world into a recession,” said Nick Raich, CEO of The Earnings Scout. “We understand the fear. We get how bad a global trade war would be on future profits.”
However, “despite fears of a global trade war, guidance among the early reporting companies are taking earnings growth expectations higher,” said Raich, noting companies are getting a substantial boost from lower corporate taxes.
Elsewhere in corporate news, Humana shares jumped 5 percent following reports that Walmart was interested in acquiring the health insurer.
Though discussions remain in early stages, sources confirmed to CNBC that Walmart is interested in strengthening its existing relationship with Humana amid a rush of deal speculation in the industry.
In economic news, the IHS Markit U.S. manufacturing PMI rose to 55.6 in March, its highest level since 2015. Meanwhile, the ISM manufacturing index reached 59.3 last month. Economists expected the number to hit 60.0.