Another round of selling grabbed Wall Street on Wednesday, when nervous investors fled health care, technology, and other high-risk stocks in favor of bond security.
Wide sales, which lost some momentum in the last hour of trading, keep the market on track for its fourth consecutive weekly loss and its first monthly decline this year.
The latest market joy, as investors, will worry that the US and China trade war will track global economic and corporate profit growth as it draws on no sign of a decision.
"This is just a bit of a decline with this notion that this trading problem can take longer to resolve what we previously thought," said Jeff Kravetz, Regional Investment Director of US Bank Wealth Management. "It is worrying that there will be lower economic growth going forward."
The S & P 500 index fell 19.37 points, or 0.7% to 2,783.02. The index had declined 1.3% earlier.
The Dow Jones Industrial Average lost 221.36 points, or 0.9% to 25.126.41. It had tumbled 409 points.
The Nasdaq composite hit 60.04 points, or 0.8% to 7.547.31. The Russell 2000 Small Business Index fell 14.07 points, or 0.9% to 1.489.95.
Major stock indices in Europe also fell.
With two trading days again in May, S & P 500 goes on a loss of 5.5%. That would be their first monthly loss since December. The market has been steadily declining this month as prospects for the economy have dimmed and as traders became more worried about the fluctuating trade fair between Washington and Beijing.
In early May, the US and China concluded their 11th round of trade negotiations with no agreement. The United States then doubled its dual duty of $ 200 billion in Chinese imports, and China reacted to raising its own tariffs.
The market's monthly decline follows an annual run for the S&P 500 which culminated in a full-time high on April 30. The benchmark portfolio is still up around 11% for the year, while the technological heavy Nasdaq composite is up above 13%.
Investors are striving to wait for the worsening trading situation between the US and China as they face "tariff exhaustion," said JJ Kinahan, chief marketing strategist at TD Ameritrade.
China's latest threat to using its rare earth supplies as a weapon is a worrying escalation, he said. Rare earths are chemical elements that are crucial to many modern technologies, such as consumer electronics.
"It shows me that there is a bit of aggravation here," he said. "They went quite deep in the bag to throw out something that would hurt."
On Wednesday, traders continued to hamper the technology stocks, which are suffering heavily in a longer trade war. Chipmaker Advanced Micro Devices fell 3.2%.
Health and communication companies also have a large share of the losses. Johnson and Johnson did 4.2% and Google's parent alphabet fell 1.7%.
The return on the benchmark portfolio 10-year government bond held at 2.26%, the lowest level for almost two years. It went down as low as 2.18% during the day.
Lower bond yields are usually a sign that traders feel uneasy about long-term growth prospects and would rather put their money into safer holdings. The yield on the 10-year government bond note is down 1 percentage point over the last six months, and sends another strong signal that investors are keen to weaken economic growth.
The 10-year certificate remained below the return on the three-year accounts. month state tax. When that type of "inversion" in the bond yields takes place over a long period of time, the economists fear it may signal a recession within the coming year. It has happened several times so far this year.
The slide in bond yields, which makes loans less profitable, continued to hurt banks and other financial stocks on Wednesday. American Express fell 1%.
The wave of sales also tightened many large retailers.
Abercrombie & Fitch plummeted 26.5% in heavy trading and Canada Goose, which makes luxury down coats, doubled 30.9% after both companies issued weak sales forecasts. Capri Holdings, which owns Versace and Michael Kors, hit 9.8% according to its own forecast also disappointed investors.
Energy futures ended mainly lower. Benchmark US crude fell 0.6% to pay off at $ 58.81 per barrel. Brent crude, the international standard, closed 0.9% lower to $ 69.45 a barrel.
Wholesale gasoline went 0.6% to $ 1.95 per gallon. The heating oil dropped 1.3% to $ 1.97 per gallon. Natural gas rose 2% to $ 2.63 per 1000 cubic feet.
Gold was 0.3% to $ 1.281 per ounce, silver added 0.6% to $ 14.41 per ounce and copper fell 1.2% to $ 2.66 per pound.
The dollar fell to 109.46 Japanese yen from 109.48 yen on Tuesday. The euro weakened to $ 1.133 from $ 1.165.