U.S. equities closed lower on Monday, notching their worst day of the year, as a new measure taken by the Trump administration on immigration sent jitters through the market.
President Donald Trump signed an executive order late Friday that would temporarily bar entry into the U.S. to Iraqi, Syrian, Iranian, Sudanese, Libyan, Somali and Yemeni citizens. The order seeks "extreme vetting" procedures for those it did allow to enter the U.S. In signing the order, Trump said he pledged to "keep radical Islamic terrorists out of the United States of America."
"We spent the first two months [following the election] focusing on the positives for companies. What we're seeing here is that life is not a straight line," said Craig Sterling, head of U.S. equity research at Pioneer Investments. "Perhaps the market is looking at the other side of things. Maybe the Trump administration is not going to do all the things businesses want."
The Dow Jones industrial average fell around 120 points after sliding more than 223.39 points, dropping below 20,000, with Goldman Sachs contributing the most losses. The S&P 500 dropped 0.6 percent, with energy shedding 1.7 percent.
The Nasdaq composite underperformed, falling 0.8 percent.
"I think it also has to do with what the immigration policy represents [in terms of] the way the Trump administration is going to operate," said John Conlon, chief investment officer at People's United Wealth Management. "The fact is that you've got a major policy that was implemented very quickly. That's causing uncertainty."
The order sparked outrage as thousands took to the streets across the U.S. in protest. Several world and corporate leaders also condemned the order. On Saturday, a federal judge issued an emergency stay to halt the deportation of people with valid visas who landed in the U.S.
"The Trump worries are now beginning to set in," said Peter Cardillo, chief market economist at First Standard Financial. "We're having this ongoing worry effect that could overtake earnings and economic data."