Investors are dealing with a painful new reality: the trade war between the United States and China could last indefinitely.

The anxiety caused by that realization rippled through the stock markets on Monday, and the S&P 500 suffered its steepest daily drop in months after China said it would increase tariffs on nearly $60 billion of American-made goods in response to a similar move last week by the Trump administration.

The American stock benchmark fell 2.4%, pushing its losses for the month above 4.5%. European shares lost 1.2% and emerging-market stocks slid 1.7%.

Shares in trade-sensitive sectors like agriculture, semiconductors and industrials were particularly hard hit. Bonds and commodities, too, flashed warnings of a slowdown.

Trade tensions have sent U.S. stocks lower in five of the past six sessions. Selling intensified Monday after China defied the Trump administration’s warning not to retaliate for his imposition of higher tariffs Friday, driving demand for havens from gold to the yen while punishing risk assets.

The recent stock losses ended a recent calm that had settled over Wall Street. For months, investors assumed that the trade war, a major hazard for the global economy, would end soon. Just weeks ago, the S&P 500 reached a record.

Source: TIME