NEW YORK (Reuters) – U.S. stocks fell on Monday after President Donald Trump threatened to raise tariffs on Chinese goods, though they pared much of their early losses as healthcare shares rose and some investors remained confident of an eventual trade agreement.

Trump on Sunday said tariffs on $200 billion worth of Chinese goods would increase to 25% from 10%, reversing a decision he made in February to retain them at 10% as the United States and China made progress on trade talks.

China said on Monday that a delegation is still preparing to go to the United States but did not mention if Vice Premier Liu He, its lead official in the negotiations, will be part of the team as originally planned.

Trump’s threat inflamed fears of a slowdown in global growth, which have periodically roiled markets over the past year. The benchmark S&P 500 fell as much as 1.6% during the session while U.S. Treasury yields dropped as investors turned to low-risk government bonds.

However, the major indexes recovered much of their losses in afternoon trading as some investors remained hopeful that a trade agreement would soon be reached.

“It seems like a negotiating stance,” said David Lefkowitz, senior Americas equity strategist at UBS Global Wealth Management’s Chief Investment Office in New York. “Our base case still is that China and the United States do find common ground.

“The probability that there is a negative outcome has probably gone up a little bit, but quantifying that, it’s hard to say,” he added.

A rise in healthcare shares helped offset the trade-driven losses. At the Sohn Investment Conference on Monday, Glenview Capital Management Chief Executive Larry Robbins said he favoured the sector.

The sector got a further lift as Centene Corp shares rose 6.6% after Reuters reported that two hedge funds have built stakes in the health insurer and are exploring a challenge to its planned acquisition of WellCare Health Plans Inc.

On the other hand, materials, industrials and technology shares dropped as investors moved away from cyclical and trade-sensitive sectors.

Boeing Co, the single largest U.S. exporter to China, fell 1.3%. Chipmakers, which get a sizable portion of their revenue from China, also tumbled. The Philadelphia chip index slid 1.7%. Apple Inc shares, which have also been sensitive to signs of weakness in China, declined 1.5%.

The Dow Jones Industrial Average fell 66.47 points, or 0.25%, to 26,438.48, the S&P 500 lost 13.17 points, or 0.45%, to 2,932.47 and the Nasdaq Composite dropped 40.71 points, or 0.5%, to 8,123.29.

In a bright spot, Anadarko Petroleum Corp shares rose 3.8% after Occidental Petroleum Corp increased the cash component of its $38 billion bid, removing a need for any deal to receive the approval of Occidental’s shareholders.

Occidental is trying to convince Anadarko to accept its offer and abandon the agreed-upon $33 billion sale to Chevron Corp. Shares of Chevron rose 1.0%.

Declining issues outnumbered advancing ones on the NYSE by a 1.45-to-1 ratio; on Nasdaq, a 1.28-to-1 ratio favoured decliners.

The S&P 500 posted 19 new 52-week highs and four new lows; the Nasdaq Composite recorded 69 new highs and 33 new lows.

Volume on U.S. exchanges was 6.45 billion shares, compared to the 6.62 billion average for the full session over the last 20 trading days.