US stocks have slipped as internet giants Alphabet and Amazon tumbled on regulatory concerns, but hopes that the United States would settle its dispute with Mexico helped limit some losses.
Alphabet declined 6.4 per cent after sources told Reuters the US Justice Department is preparing an investigation of the Google parent to determine whether the company broke antitrust laws in operating its online businesses.
Amazon.com slipped 3.5 per cent after a report the e-commerce giant could face heightened antitrust scrutiny under a new agreement between US regulators.
“Big tech has been a favourite of investors and if they decide that risks from antitrust will take a turn for the worst for them, then that is going to have an impact on the market as a whole,” Meckler added.
Their fall weighed on the communication services and the consumer discretionary sectors.
Weak data also weighed on sentiment. The latest ISM survey showed US manufacturing growth surprisingly slowed in May to its weakest pace in more than two-and-a-half years.
Market uncertainty has sent investors fleeing for safety in bonds, which pushed yields on US two-year notes to their biggest two-day fall since 2008, reflecting growing conviction that the Federal Reserve will start cutting interest rates to stave off recession.
Offering some respite, Mexican officials said the country could reach an agreement with the US to resolve a dispute over migration that prompted President Donald Trump to threaten punitive tariffs last week, which resulted in Wall Street’s main indexes ending May 6 per cent lower.
“Investors will remain concerned about trade until there is a resolution, particularly the Mexico situation, which is capable of being resolved,” said Rick Meckler, partner, Cherry Lane Investments, New Vernon, New Jersey.
At 10.01am local time on Monday, the Dow Jones Industrial Average was down 58.94 points, or 0.24 per cent, at 24,756.10. The S&P 500 was down 7.76 points, or 0.28 per cent, at 2,744.30 and the Nasdaq Composite was down 61.99 points, or 0.83 per cent, at 7,391.16.
Healthcare stocks, the worst performing sector this year, rose 0.37 per cent, and supported the market, helped by Humana and Merck.
Merck rose 1 per cent as investors were optimistic about data that showed nearly a quarter of patients who received immunotherapy Keytruda as an initial treatment for advanced lung cancer were still alive after five years.
Humana gained 5.5 per cent after the company said it would not make a proposal to combine with health insurer Centene, which plunged 8.4 per cent.
Boeing, the single largest US exporter to China, fell 2.9 per cent and was the biggest drag on the bluechip Dow index.
Cypress Semiconductor surged 23.2 per cent after German chipmaker Infineon Technologies agreed to buy the US peer in a deal valued at 9 billion euros ($A14 billion).
Advancing issues outnumbered decliners by a 1.95-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 12 new lows, while the Nasdaq recorded 11 new highs and 72 new lows.