Stocks tumble on trade-tension pessimism

Stocks fell the most in almost three weeks as rising pessimism that trade tensions with China will persist helped send technology and multinational companies tumbling.

Treasuries climbed, oil fell and the yen strengthened.

Chipmakers plunged more than three percent, with every member of the Philadelphia Semiconductor index in the red.

Caterpillar and DowDuPont led declines in the Dow Jones Industrial Average of more than 400 points at one point.

The S&P 500 briefly pared losses after presidential adviser Lawrence Kudlow said a Financial Times report that the U.S. canceled a preliminary meeting with Chinese officials was untrue.

'Investors obviously are still a little bit edgy and therefore we would expect periods of volatility to continue,” said Mark Hackett, chief of investment research at Nationwide Funds Group, which manages $60 billion.

'As the headlines continue to get more nerve wracking with regards to a global slowdown and trade wars and government shutdowns, it's easy to spook investors, but we think those are temporary versus permanent.”

At the close, the S&P 500 index had fallen 1.4 percent, to 2,633. The Nasdaq Composite Index tumbled 1.9 percent, to 7,020.

The Dow Jones Industrial Average declined 1.2 percent to 24,405.

Gold, meanwhile. rose 0.7 percent, to $1,285 an ounce.