The domestic equity markets were lower on Monday in a broad sell-off as simmering geopolitical tensions alarmed equity investors as the protracted U.S.-China trade war stoked fears of impending recession.

All three major domestic equity stock indexes closed sharply lower in light trading, with little to soothe market jitters over Hong Kong protests, Argentine President Mauricio Macri’s primary election defeat, and the U.S.-China tariff dispute that has rattled markets for months.

The closely watched yield spread between 2-year and 10-year Treasury notes narrowed to its smallest difference since at least 2010, according to Refinitiv data.

Data on inflation, housing starts, and retail sales are due later in the week, and will be scrutinized for further signs of economic softening.

All 11 major sectors of the S&P 500 ended the session in negative territory, with financials, materials, energy and consumer discretionary suffering the largest percentage drops.

Second-quarter reporting season is approaching the finish line, with 452 of the companies in the S&P 500 having reported. Of those, 73.5% have exceeded consensus estimates.

Looking ahead to the third quarter, there have been 58 negative pre-announcements compared with 19 positives, resulting in a 3.1 negative-positive ratio, higher than 2.7 average since 1997, according to Refinitiv.

Streaming platform Roku gained 7.2% after a research note from Needham picked the stock over larger rival Netflix Inc.

Shares of Amgen were up 4.9% following a court ruling that upheld two patents relating to its drug Enbrel.

Coach owner Tapestry Inc and Versace owner Capri dropped 3.9% and 4.4%, respectively, after Chinese social media criticized the companies for selling T-shirts that showed Chinese-controlled territories of Hong Kong and Macau as countries.

Media companies CBS and Viacom are in the final stages of negotiating an all-stock merger that values Viacom at a discount to its Friday closing price, sending Viacom shares down 4.9%.

Approximately 6.09 billion shares changed hands on the major domestic equity exchanges, as compared to the 7.24 billion share average over the past 20 trading days.

Goldman Sachs – Rising Probability of Recession

Goldman Sachs indicated on Sunday that fears of the U.S.-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 U.S. presidential election.

“We expect tariffs targeting the remaining $300bn of US imports from China to go into effect,” the bank said in a note sent to clients.

The year-long trade dispute has revolved around issues such as tariffs, subsidies, technology, intellectual property and cyber security, among others.

Goldman Sachs said it lowered its fourth-quarter GDP forecast by 20 basis points to 1.8% on a larger than expected impact from the developments in the trade tensions.

 “Overall, we have increased our estimate of the growth impact of the trade war,” the bank said in a note authored by three of its economists, Jan Hatzius, Alec Phillips and David Mericle.

Rising input costs from the supply chain disruption could lead U.S. companies to reduce their domestic activity, the note said. Such “policy uncertainty” may also make companies lower their capex spending, the economists added.