The Dow plunged below 26,000 as demand for safe haven assets fueled spikes in gold and US Treasury bond prices. | Source: REUTERS/Brendan McDermid/File Photo
The Dow and broader U.S. stock market plunged anew on Monday, as threats to global economic health fueled a massive rally in haven assets like Treasuries and gold bullion.
According to Goldman Sachs, bullion prices are heading higher over the next six months as U.S.-China trade tensions continue to erode risk sentiment.
Dow Plunges 400 Points; S&P 500, Nasdaq Follow
All of Wall Street’s major indexes were trading sharply lower, mirroring a volatile pre-market for Dow futures. The Dow Jones Industrial Average plunged 398.18 points, or 1.51%, to 25,889.26. Twenty-nine of 30 index members were in the red.
The broad S&P 500 Index of large-cap stocks fell 1.32% to 2,880.26, with all sectors reporting losses. Financials stocks were the hardest hit, falling 1.9%. Seven other sectors declined by 1% or more.
The technology-focused Nasdaq Composite Index dumped 1.33% to 7,853.13
Rise of the Safe Havens
Turbulence in stocks fueled a large rally across haven assets, pushing the benchmark 10-year U.S. Treasury yield lower by 10 basis points. The yield reached a session low of 1.640%, according to CNBC, which is still higher than last week’s bottom of 1.595%. Bond yields fall when prices rise.
Gold prices were back near six-year highs, with the December futures contract reaching a high of $1,519.90 a troy ounce on the Comex division of the New York Mercantile Exchange. The futures contract was last up $8.70,