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U.S. stock futures turned lower and major equity indices pulled back early, continuing to shake off better-than-expected earnings from Caterpillar and other sectors, despite improving corporate results.
Investors continued to be rattled by trade issues and worried about the recent slowdown in the global economy, with the trade tension between the U.S. and China escalating, and U.S. President Donald Trump saying on Monday that China must cut its trade surplus with the U.S. and granted Treasury Secretary Steven Mnuchin additional time to negotiate a trade deal.
Friday's swing in the Dow was prompted by dismal earnings reports from auto parts maker Eaton Corp and other sectors, with Caterpillar giving a weaker-than-expected profit.
The Dow Jones industrial average plunged 666.44 points, or 2.1 percent, to close at 23,710.54, hitting its lowest since Oct. 10, and the S&P 500 dipped 5.38 points, or 0.2 percent, to 2,596.41. The Nasdaq composite declined 20.81 points, or 0.3 percent, to 6,670.76, as the losses in the technology-heavy index narrowed following the Dow's plunge.
"The U.S.-China trade tensions has been clearly impacting the markets, and even after yesterday's equity market rally, investors are still shying away from riskier assets," said Nick Raab, head of fixed income and currency trading at BMO Global Asset Management.
Shares of Eaton declined 11.2 percent, while Caterpillar shed 2.5 percent. The Dow had slumped nearly 6 percent as recently as Monday, with all 11 of its major sectors in negative territory.
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