While stocks pared losses in the last hour of trading on Monday to finish off their session lows, the benchmark S&P 500 fell about 3 per cent to notch its biggest one-day percentage decline since December 4. The index has fallen for six straight sessions and is now about 6 per cent below its record closing high on July 26.

A weaker yuan and a stronger US dollar pose challenges for US companies that do substantial business in China by effectively raising the cost of their goods for Chinese customers. Adding to the tensions, China’s commerce ministry said Chinese companies have stopped buying US agricultural products and that China will not rule out imposing import tariffs on US farm products that were bought after 3 August.

Shares of S&P 500 technology companies, which are heavily exposed to Chinese markets, dropped 4.1 per cent. Apple shares slid 5.2 per cent as analysts warned that the newly proposed tariffs may hurt demand for the iPhone, while the Philadelphia semiconductor index dropped 4.4 per cent.

The Dow Jones Industrial Average on Monday fell 767.27 points, or 2.9 per cent, to 25,717.74; the S&P 500 lost 87.31 points, or 2.98 per cent, to 2,844.74; and the Nasdaq Composite dropped 278.03 points, or 3.47 per cent, to 7,726.04. The Cboe Volatility Index, an options-based gauge of investor anxiety, rose 6.98 points to 24.59, its highest in about seven months. Top US meat processor Tyson Foods was one bright spot. Its shares rose 5.1 per cent after the company beat quarterly profit estimates.

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