Stock losses accelerated by late morning Monday as the fallout from last week's 'Brexit' vote punished global markets.
The S&P 500 was down 2%, the Dow Jones Industrial Average declined 1.7%, and the Nasdaq fell 2.5%. All benchmark indexes are now negative for 2016.
A vote for a "Brexit" rocked world markets Friday after days of growing confidence that the United Kingdom would opt to remain in the European Union. The U.K. referendum resulted in victory for the "leave" campaign with 51.8% support.
"Greater uncertainty about the prospects for global growth and increased financial market volatility could make U.S. businesses more cautious in hiring and investing," Bill Stone, chief investment strategist at PNC Asset Management Group, said of the fallout of the vote. "Uncertainty and volatility will also push investors to seek the safety of the dollar, making the currency strengthen in the near term. This will make U.S. exports abroad more expensive and imports to the U.S. less expensive, creating a drag on growth."
European markets were also sharply lower. Germany's DAX fell 3.1%, the CAC 40 in France declined 3.1%, and the FTSE 100 in London slid 2.4%.
Crude oil prices fell to a one-week low as fears over the 'Brexit' crescendoed. Commodity traders grew concerned that the U.K.'s exit from the EU could depress economic demand for oil. West Texas Intermediate was down 2.4% to $46.51 a barrel on Monday.
Major banking stocks continued their decline over worries of two years of renegotiations across Europe. Regulations for the finance industry, particularly regarding cross-border transactions among EU countries, will likely be altered as the U.K. prepares its EU exit.
George Osborne, the U.K. Chancellor of the Exchequer, assured that the Treasury and the Bank of England have come up with further contingency plans following Britain's vote to leave the EU. Osborne said "swap lines" had been established so institutions could access foreign currency if needed. He also warned that volatility would likely continue for now.
Safe-haven assets such as gold were on the rise as traders fled riskier investments. Gold jumped nearly 5% on Friday in its best rally in seven years. Gold producers such as Randgold Resources (GOLD) - Get Report climbed 6%.
The U.S. international trade deficit widened to $60.6 billion in May from $57.5 billion in April, according to the Census Bureau. Economists had expected the deficit to widen to just $59.3 billion. Weaker export activity and a pickup in import demand weighed on the trade balance. The wider-than-expected deficit likely pulled second-quarter GDP down to 2.5% from previous estimates of 2.7%, according to TD Securities.
Medtronic (MDT) - Get Report agreed to buy Heartware (HTWR) in a deal valued at $1.1 billion. Medtronic will pay $58 a share, a 93% premium to Heartware's closing price on Friday. The deal is expected to close in Medtronic's quarter ending in October.