(Reuters) – The Dow Jones Industrial Average tumbled more than 700 points in a global selloff on Monday, triggered by China’s willingness to let the yuan slide in response to the latest U.S. threats on trade.

The yuan sank to its lowest level in more than a decade, and President Donald Trump slammed it as “a major violation”, sending investors scurrying for the safety of assets such as government bonds, gold and the Japanese yen.

Adding to the tensions, China’s Commerce Ministry said that Chinese companies have stopped buying U.S. agricultural products, and that China will not rule out imposing import tariffs on U.S. farm products that were bought after Aug. 3.

Trump stunned financial markets last week by threatening to impose 10% tariffs on the remaining $300 billion of Chinese imports, abruptly abandoning a brief ceasefire.

“The President is playing a very risky game here,” said Robert Pavlik, chief investment strategist, senior portfolio manager at Slatestone Wealth Llc in New York.

“The Chinese yuan weakening the way it has and with interest rates tanking, I think the possibility of a recession has been pushed up.”

The benchmark S&P 500 .SPX is set to fall for the sixth straight session, its longest streak of losses since October 2018. The selloff was broad, with all the 11 major S&P sectors in the red.

Last week, the U.S. Federal Reserve cut interest rates for the first time in a decade as expected but poured cold water on investor hopes of a long easing cycle to cushion the economy from the bruising trade war.

A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 5, 2019. REUTERS/Brendan McDermid

The S&P technology sector .SPLRCT, heavily exposed by its chipmakers and other global technology players to Chinese markets, dropped 3.5%.

Apple Inc (AAPL.O) slid 4.7% as analysts warned that the newly proposed tariffs may hurt demand for its flagship iPhone, while the Philadelphia chip index .SOX slipped 4.1%.

At 12:55 p.m. ET, the tech-heavy Nasdaq Composite .IXIC was down 269.70 points, or 3.37%, at 7,734.37. The Dow Jones Industrial Average .DJI was down 743.46 points, or 2.81%, at 25,741.55 and the S&P 500 .SPX was down 82.70 points, or 2.82%, at 2,849.35.

The CBOE Volatility index .VIX, a gauge of investor anxiety, rose to its highest level in about three months at 22.40 points.

U.S. Treasury yields tumbled, with the 10-year yields hitting their lowest level since November 2016.

The difference between the three-month Treasury bill rate US3MT=RR and 10-year yields US10YT=RR increased to the widest since April 2007. This curve “inversion” between the two maturities has preceded every U.S. recession in the past 50 years. [US/]

Interest-rate sensitive banks .SPXBK shed 3.40%.

The rest of the high-flying FAANG group also lost ground. Facebook Inc (FB.O), Amazon.com Inc (AMZN.O), Netflix Inc (NFLX.O) and Google-parent Alphabet Inc (GOOGL.O) were down between 2.5% and 3.1%.

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No.1 U.S. meat processor Tyson Foods Inc (TSN.N) was one bright spot, up 8.6% after beating quarterly profit estimates.

Declining issues outnumbered advancers for a 6.35-to-1 ratio on the NYSE and for a 6.72-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 26 new lows, while the Nasdaq recorded 11 new highs and 229 new lows.

Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Additional reporting by Sinead Carew; editing by Patrick Graham, Sriraj Kalluvila and Saumyadeb Chakrabarty

Our Standards:The Thomson Reuters Trust Principles.

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