Wall Street recovers part of early losses, ends day modestly lower

Major equity indexes in the United States started the day on a negative note as concerns over the trade conflict between China and the United States forced Asian and European indices close the day in the negative territory.

“If people thought this was really going to be a trade war, stocks would be down a lot more. The fact they’re down so little means that people think what the Trump administration is doing is part of their negotiating strategy,” Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina, told Reuters.

The tariffs that China is planning to impose starting July 6 include tobacco products, which weighed on the S&P 500 Consumer Staples Index (SPLRY) and caused it to drop 1.5%.

The CBOE Volatility Index (.VIX), which rose as much as 10% during the early trading hours of the session, retraced the majority of its upside and finished the day only 3% higher. 

Meanwhile, ahead of the OPEC's Vienna summit at the end of this week, oil prices staged a modest recovery on Monday with the barrel of West Texas Intermediate settling $65.85 with a daily gain of 80 cents. The S&P 500 Energy Index (SPNY) added 1.12% on Monday to become the best performing sector of the day.

After dropping nearly 1% during the first hour of the session, the Dow Jones Industrial Average closed 0.4%, or 101.91 points, lower at 24,988.57. The S&P 500 fell 5.79 points, or 0.21%, to 2,773.87 and the Nasdaq Composite was virtually unchanged at 7,747.03.