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 Stocks fell sharply Tuesday after optimism for easing trade tensions between Washington and Beijing waned and as Treasury yields turned lower, stirring worries about the prospect of slowing economic growth around the world. The Dow Jones Industrial Average dropped 3%, or nearly 800 points. The Nasdaq Composite plunged 3.8%, meanwhile, and the S&P 500 shed 3.2% to below its 200-day moving average. The three US indices had all jumped more than 1% on Monday as President Donald Trump touted his weekend meeting with Chinese President Xi Jinping. But trade expectations unwound after key details on the framework of negotiations appeared unsettled. Trump called himself "a Tariff Man" in a tweet about China early Tuesday, a reminder that further escalations are on deck if a deal isn't reached within 90 days. Trade-sensitive stocks were among the Dow's biggest losers, with Caterpillar down nearly 7% and Boeing 4.8% lower. Not helping the mood, Trump named US Trade Representative Robert Lighthizer to lead negotiations going forward. Lighthizer is seen as a hardliner on China, so the pick cast doubt on expectations for a quick agreement. "While this outcome is preferable to many alternatives, investors should be clear that agreeing to negotiate is no guarantee of resolution," said Ron Temple, managing director and head of US Equities at Lazard Asset Management. "Details are scant and the two sides have offered different statements of what was agreed." Treasury yields continued to slide, with the 10-year down 7.6 basis points to 2.915%. Spreads between long- and short-term bonds inverted, an occurrence seen as a potential recession signal, for the first time since the financial crisis. "The inversion of parts of the yield curve is further evidence that investors are coming round to our downbeat view of the prospects for the US economy, and points to further weakness in the S&P 500," said John Higgins, an analyst at Capital Economics. Adding to concerns, Brexit debates in the UK's House of Commons got off to a rocky start. Prime Minister Theresa May suffered a series of setbacks Tuesday, and the British government was found in contempt of Parliament after not publishing the full legal advice on plans to leave the European Union. The dollar stumbled 0.7% against the Japanese yen, a closely-watched exchange rate during times of financial stress. The VIX, meanwhile, jumped by nearly a quarter to 20.48. Oil prices climbed from recent lows ahead of a meeting Thursday and Friday among OPEC and other major producers led by Russia, who are expected to make a deal to cut coordinated output levels. West Texas Intermediate fell to trade just below $53 per barrel, and Brent was down 0.5% to $61.58. SEE ALSO: Trump's newest pick to lead the trade fight against China reportedly took the Chinese by surprise and could be bad news for a deal | 
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