U.S. stocks and commodities tumbled after China retaliated with higher tariffs on a range of American goods. Treasuries jumped with the Japanese yen on demand for haven assets.

The S&P 500 dropped the most in four months and the Dow Jones Industrial Average slumped more than 600 points after China targeted some of the nation’s biggest exporters. Boeing dropped 4.9 per cent, Caterpillar Inc. fell 4.6 per cent and Apple Inc. lost 5.8 per cent. The new penalties also took aim at American farmers, driving down soybean and cotton prices. The dollar rallied and the 10-year Treasury yield fell to the lowest level since late March.

Shares briefly came off lows during Monday’s session after President Donald Trump indicated he’ll speak with China’s Xi Jinping at the end of June during the G-20 summit and said he hasn’t yet decided about fresh tariffs on the remaining US$300 billion in Chinese imports.

Trade rattled financial markets again, with stocks sinking for the fifth time in six sessions since China’s defiance of Trump’s warning not to retaliate for his imposition of higher tariffs Friday escalated the skirmish, driving demand for havens from gold to the yen while punishing risk assets. Several banks have warned that the eruption increases the likelihood of a slowdown in global growth that would dent corporate profits.

“China retaliating as fast as they did was a clear signal they’re not going to be pushed around,” said Samantha Azzarello, global market strategist for JPMorgan ETFs. “Markets would like a little bit more play nice and maybe even a bit of complacency from China. It was interesting it wasn’t done on the weekend. It was done just in time, Monday morning for markets to open.”

Elsewhere, European shares dropped more than 1 per cent after the European Union said it was finalizing a list of U.S. goods to target in the event Trump imposes levies on car imports. Oil turned lower after rising earlier on concerns about rising tensions in the Persian Gulf. Bitcoin climbed above US$7,000 as the recent gains in cryptocurrencies extended over the weekend.

Here are some notable events coming up this week:

Earnings this week include Vodafone, Alibaba, Tencent, Cisco, Nvidia. New York Fed President John Williams speaks at an event in Zurich. Kansas City Fed President Esther George and Richmond Fed President Thomas Barkin also make appearances. Japan balance of payments is due Tuesday. China industrial production and retail sales are slated for Wednesday, same day as U.S. retail sales and industrial production. Bank of Indonesia has an interest rate decision on Thursday. Australian unemployment is out on Thursday.

And here are the main market moves:

Stocks

The S&P 500 Index decreased 2.4 per cent as of 4 p.m. New York time, the biggest drop since Jan. 3. The Dow Jones Industrial Average slid 2.4 per cent, while the Nasdaq Composite Index tumbled 3.4 per cent. The Stoxx Europe 600 Index fell 1.2 per cent to the lowest in two months. The MSCI Asia Pacific Index declined 0.9 per cent. The MSCI Emerging Market Index decreased 1.7 per cent.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 per cent. The euro was little changed at US$1.1232. The British pound fell 0.3 per cent US$1.2963. The Japanese yen jumped 0.6 per cent to 109.33 per dollar.

Bonds

The yield on 10-year Treasuries fell seven basis points to 2.398 per cent, the lowest since March 28. Germany’s 10-year yield dipped two basis points to -0.07 per cent. Britain’s 10-year yield declined three basis points to 1.10 per cent.

Commodities

West Texas Intermediate crude dropped 1.4 per cent to US$60.81 a barrel. Gold increased 1 per cent to US$1,300.10 an ounce.