New York: US stocks and Treasury yields fell on Monday as rhetoric from the US President Donald Trump heightened the threat of a global trade war. The euro fluctuated after Italy’s election left the country’s political leadership in limbo.

The S&P 500 Index dropped for the fourth time in five days after a flurry of tweets from Trump signalled he has no intention of backing down from plans for broad tariffs that could crimp profits at America’s biggest companies. Treasuries continued to push higher on a haven bid, while the greenback gained versus most peers. West Texas crude traded around $61 a barrel.

In Europe, the broadest measure of the region’s equities halted a four-day slide after a major breakthrough on the path to a German government. Italy’s stocks and bonds were the standout losers as anti-establishment political groups surged in Sunday’s election.

The Italian election result and Germany’s move towards a coalition kick off a busy week for macro events. Both the Bank of Japan and European Central Bank will meet to decide on interest rate policy, while China hosts its National People’s Congress. Overshadowing it all, however, will be the next developments on global trade after Trump riled markets with his proposed tariffs last week. America won’t lower duties on steel and aluminium from Mexico and Canada unless the two countries agree to a revamped Nafta, he said in a tweet on Monday.

There’s a “lot of politics this week, with Italy elections and NPC in China, also trade measures,” Frank Benzimra, head of Asia equity strategy at Societe Generale SA in Hong Kong, said. “The return of volatility we have seen since the end of January will probably remain”.

Elsewhere, West Texas oil fluctuated as geopolitical risk resurfaced, with a halt at Libya’s biggest crude field sparking speculation that supply will tighten and help reduce a global glut. Shanghai stocks bucked regional weakness as China kept its 2018 growth target of around 6.5 per cent.