Opening Bell: Investors Cash Out On Trade, Political Fears; WTI Pops

Yesterday, worries that the US-Sino trade dispute would end the first synchronized global growth in a decade were reignited after China refused to meet with US representatives unless the Trump administration stopped threatening to impose further tariffs. Further weighing on stock performance were reports that US Deputy Attorney General Rod Rosenstein, who oversees a probe into Russia's interference with the 2016 US presidential election, could soon leave his post.

The S&P 500 dropped 0.35 percent, extending the over 0.7 percent take-profit correction that followed the index's new all-time-highs. Industrials (-1.71 percent) and Materials (-1.4 percent) both slid on the trade war escalation. Real Estate stocks (-1.96 percent) underperformed, while Energy shares (+1.46 percent) outperformed on the back of oil's price surge following the decision, by OPEC and NOPEC oil producers, to refrain from stepping up production to offset potential Iran supply glitches. Consumer Staples (-1.53 percent) also fell, underscoring investor eagerness to cash out.

The Dow Jones Industrial Average, whose listed mega-cap firms depend heavily on foreign markets, was Monday's worst performer, giving up 0.68 percent. The Russell 2000 slipped 0.41 percent. The NASDAQ Composite was the only US major closing in positive territory, edging 0.08 percent higher.

Despite the prospect of higher interest rates looming and the increased trade risk, the dollar seems unable to climb back up above 95.00, where it found support for over two months. Perhaps the Fed's expected hike on Wednesday is already fully priced in, or the greenback is loosing its shine as the go-to safe haven in times of trade uncertainty.

Interestingly, traders are also not seeking refuge in the yen, which fell for the fourth straight day against the USD. A close at this level would mark the lowest level for the Japanese currency since January.

Gold is flat, which suggests that investors are also shunning the yellow metal's trademark safety.

Meanwhile, yields on 10-year Treasurys reached 3.104, just under 0.8 percent away from their highest level since July, as investors sold off their bond holdings. If we also consider yesterday's equity losses, it appears that traders have held onto cash.

Crude oil reached the halfway point to $73 after OPEC and Russia were seen unwilling to step up their production to offset a potential shortage stemming from Iran's sanctions. Brent oil futures crossed over the $80 level, a resistance level since mid-May, hitting a four-year high. Technically, WTI extended a penetration to an H&S bottom neckline. This upward trajectory could signal a new era for energy prices.