Wall Street falls the most this year as Trump honeymoon sours
An executive order issued by Trump on Friday banned immigration from seven Muslim-majority countries, including legal residents and visa holders, and temporarily halted the entry of refugees. Over the weekend, thousands of people rallied in major U.S. cities and at airports in protest.
U.S. equities had hit a series of record highs following Trump's election in November, encouraged by his promise of tax cuts and simpler regulations.
"Investors focused on the pro-growth of (Trump's) proposals and not those detrimental to economic activity, like protectionism," said Peter Cardillo, chief market economist at First Standard Financial in New York.
He said investors wore blinders to only see the market-friendly policies Trump spoke about during the campaign and the immigration ban was a reminder of actions he could take that could undermine the economy.
Technology, a sector which has openly opposed bans on immigration and hurdles to hiring foreign talent, weighed the most on the S&P 500.
The Dow Jones Industrial Average .DJI fell 122.65 points, or 0.61 percent, to close at 19,971.13, the S&P 500 .SPX lost 13.79 points, or 0.60 percent, to 2,280.9 and the Nasdaq Composite .IXIC dropped 47.07 points, or 0.83 percent, to 5,613.71.
It was the largest daily percentage drop for the Dow since October, while the S&P and Nasdaq dropped the most since late December.