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Michael Nagle | Bloomberg | Getty Images
Traders are working on the floor of the New York Stock Exchange (NYSE) in New York, USA on Monday, December 31, 2018.
At the same time, the European Commission has sharply lowered its economic growth forecasts for the euro area in 2019 and 2020, reviving fears of a slowdown in the global economy.
The growing uncertainty surrounding US-China trade relations and growing worries about the global economy coincide with the worsening profit outlook for 2019.
First quarter results for 2019 are expected to contract by more than 1%, according to FactSet data. If profits fall, it will be the first contraction in S & P 500 earnings since the second quarter of 2016, when they fell 2.52%.
"Whether the financial burden of a fast-paced share of equities persists or falters depends largely on future economic data and earnings, that protectionist tensions are improving / worsening and that the market is bond remains calm, "writes in a note the strategists of MRB Partners. "The technical outlook for equities looks positive, even though many indices are now approaching resistance levels.There seems to be a moderate number of investors waiting for a correction to be able to add positions, which usually means that the lows will be brief. "
Shares also fell on Friday as shares of chips fell. The VanEck Vectors Semiconductor (SMH) ETF fell 1.1% after an badyst at Goldman Sachs said the space had been getting ahead of itself.
"Our recent discussions within the industry suggest that the fundamentals of memory remain very fragile and that prices continue to fall," said Goldman badyst Mark Delaney.
Qorvo shares fell by more than 9% while Micron Technology lost 2.6%. Nvidia, meanwhile, declined by more than 1.5%.
-CNBC & # 39; s
Sam Meredith
contributed to this report.
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