The Dow slumped 389.83 points (1%) to 40,829.00, the Nasdaq slid 154.58 points (0.9%) to 17,689.66 and the S&P 500 fell 43.37 points (0.8%) to 5,606.91.

Treasury Secretary Scott Bessent told CNBC on Monday the U.S. is very close to some deals, the lack of any concrete developments from trade talks has kept investors on edge. During a meeting with Canadian Prime Minister Mark Carney, President Donald Trump expressed frustration with the media's repeated questions about when the U.S. will sign new trade deals even as he claimed he could sign 25 deals right now.

The U.S. trade deficit surged to a record \$140.5 billion in March, up from \$123.2 billion in February, driven by a 4.4% jump in imports to \$419.0 billion and a slight 0.2% rise in exports to \$278.5 billion. This unexpected spike contributed to weakness on Wall Street as investors turned cautious. Attention now shifts to the Federal Reserve's policy announcement on Wednesday. While there's a 96.8% chance rates will remain unchanged, traders are keenly awaiting signals about future rate decisions.

Biotech stocks significantly moved downwards, with the NYSE Arca Biotechnology Index plunging by 5.1% after ending the Monday's trading at its best closing level in a month. Vertex Pharmaceuticals (VRTX) helped lead the sector lower, plummeting by 10.0% after reporting weaker than expected first quarter results. Pharmaceutical stocks were considerably weak, as reflected by the 3.7% slump by the NYSE Arca Pharmaceutical Index. Healthcare, transportation and housing stocks were notably weak while gold stocks extended Monday's rally amid a continued surge by the price of the precious metal.

Asia-Pacific turned in another mixed performance , with markets in Japan and South Korea closed for holidays. China's Shanghai Composite Index jumped by 1.1%, while India's Nifty 50 Index dipped by 0.3%. European stocks moved mostly lower. The U.K.'s FTSE 100 Index ended the day nearly unchanged, the French CAC 40 Index and the German DAX Index both fell by 0.4%.

In the bond market, treasuries moved to the upside as the day progressed after showing a lack of direction in morning trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.5 bps to 4.30%.

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