Dow sinks 400 points in early trade as the stock market contends with a fresh threat: a rising dollar

The Dow Jones Industrial Average early Monday was trading near session lows, amid a firming U.S. dollar. Last week, investor sentiment was buffeted by a rapid decline in crude-oil prices CLZ8, +0.90% which fell into bear-market territory, defined as a drop from a recent peak of at least 20%. And while that threat has stabilized somewhat, with the Organization of the Petroleum Exporting Countries considering cuts to production to address rising crude-oil inventories, a new problem appears to knocking stocks around. Some market participants were attributing a rise in the dollar to a roughly 1 1/2-year high as one of the key factors producing fresh headwinds for the broader market.

A popular gauge of the buck, the ICE U.S. Dollar Index DXY, +0.50% was trading at 97.48, representing its highest level since June of 2017, according to FactSet data. A stronger dollar can hurt sales of multinational companies, making goods relatively more expensive to customers purchasing abroad. Meanwhile, the bond market was closed in observance of Veterans Day. Most recently, the Dow DJIA, -1.69% was down 400 points, or 1.6%, at 25,584, the S&P 500 index SPX, -1.58% was off 1.5% at 2,738, while the Nasdaq Composite Index COMP, -2.58% retreated by 2.7% at 7,204.

To be sure, a decline in shares of Apple Inc. AAPL, -4.70% after a series of negative reports on its holiday shipping also was weighing on technology and internet-related stocks and the broader market. A sharp decline in shares of Goldman Sachs Group Inc. GS, -5.98% also was delivering a hefty blow to the Dow and the broader market.