NEW YORK (Reuters) - The Nasdaq confirmed it was in a correction on Monday as stocks extended their recent sell-off, and the continued flight to safe-haven assets pushed 10-year U.S. Treasury yields to their lowest since September 2017.

The Nasdaq ended the session more than 10% lower than its May 3 closing record, falling 1.6% on the day after regulatory fears sent shares of internet giants Alphabet Inc, Facebook Inc and Amazon.com Inc sharply lower.

But driving the recent fall in stocks and bond yields has been deepening trade conflicts between the United States and its partners.

The Nasdaq has been falling since its May 3 record high, hit just before U.S. President Donald Trump’s tweet on trade that set off a month of turbulence. Global stock markets shed over $2 trillion in value in May.

“The slump has been concurrent with fears of slowing global growth,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

Investors again sought protection from market volatility in low-risk assets such as Treasuries and gold.

A gloomy economic outlook is prompting traders to increase bets that the U.S. Federal Reserve will cut interest rates sooner rather than later.

In late U.S. trading, federal funds futures implied traders saw about a 67% chance the U.S. central bank would reduce key short-term borrowing costs by a quarter point to 2.00%-2.25% at its July 30-31 policy meeting.

Yields on U.S. two-year notes had their biggest two-day fall since 2008, while U.S. benchmark 10-year Treasury yields hit 2.062%, their lowest since September 2017. German government bond yields earlier fell to an all-time low.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 3, 2019. REUTERS/Brendan McDermid

“What the bond market is telling us is that all of these pressures put together create a likely economic slowdown which is pushing yields down,” said Eric Kuby, chief investment officer, North Star Investment Management Corp in Chicago.

Treasury yields extended their decline following remarks from St. Louis Federal Reserve President James Bullard who said a U.S. rate cut may be “warranted soon” because of global trade tensions and weak U.S. inflation.

Gold prices jumped more than 1.5% to their highest level in more than three months on the trade concerns.

In addition to increasing tariffs on Chinese imports in recent weeks, the White House has hardened its stance toward other countries, including Mexico.

The Dow Jones Industrial Average rose 4.74 points, or 0.02%, to 24,819.78, the S&P 500 lost 7.61 points, or 0.28%, to 2,744.45 and the Nasdaq Composite dropped 120.13 points, or 1.61%, to 7,333.02.

An index of global stocks edged higher on Monday.

The pan-European STOXX 600 index rose 0.39% and MSCI’s gauge of stocks across the globe gained 0.07%.

The dollar index fell 0.52%, while the Japanese yen strengthened 0.02% versus the greenback at 108.06 per dollar.

In the energy market, oil fell amid the escalating U.S. trade disputes. Brent crude futures settled at $61.28 a barrel, losing 71 cents, or 1.2%. U.S. West Texas Intermediate (WTI) crude ended 25 cents, or 0.5%, lower at $53.25 a barrel.

With the bitter trade mood weighing, factory activity slowed in the United States, Europe and Asia last month, surveys showed.

The Institute for Supply Management said its gauge of U.S. manufacturing activity unexpectedly fell in May to the weakest level in more than 2-1/2 years.