US stocks have ended lower, weighed down by lingering uncertainty over the outcome of trade talks between the United States and China and declines in energy and industrial shares.
President Donald Trump on Tuesday said he was not pleased with recent trade talks between the US and China and earlier said there was no deal yet with China on ZTE Corp.
Trump floated a plan to fine ZTE and shake up its management after his administration considering rolling back more severe penalties imposed for violating US sanctions by shipping goods to Iran.
Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12.
The president’s comments come after US Treasury Secretary Steven Mnuchin said over the weekend that the two countries had put the prospect of a trade war “on hold” and agreed to hold more talks to boost US exports to China.
“As day worn on, Trump’s comments about North Korea and not having a deal with ZTE just brought people back from yesterday’s euphoria into more of a reality that this issue with trade is not going to end as quickly as many had thought,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
The Dow Jones Industrial Average fell 178.88 points, or 0.72 per cent, at 24,834.41, the S&P 500 lost 8.57 points, or 0.31 per cent, to 2,724.44 and the Nasdaq Composite dropped 15.58 points, or 0.21 per cent, to 7,378.46.
The industrial sector dipped 1.3 per cent, a day after posting its best percentage gain in nearly two months on the trade truce, while the energy index also fell 1.3 per cent.
Tesla shares fell 3.3 per cent, sending the stock to its lowest close since early April, a day after Consumer Reports said the company’s new Model 3 car, despite many positives, had “big flaws,” highlighting issues with braking.
Tesla Chief Executive Elon Musk late on Monday tweeted that the braking flaw can be fixed with a software update, and Consumer Reports said it would retest the brakes.
The financials sector rose 0.6 per cent on hopes that a bill aimed at easing bank rules, put in place after the financial crisis, could be passed as soon as this week.
Steel stocks climbed after the US said it would slap steep import duties on steel products with origins in China but shipped from Vietnam to evade anti-dumping orders.
Carmakers Ford, General Motors and Fiat Chrysler gained slightly after Beijing announced tariff cuts on car imports.