US stocks have ended near flat and the Dow has snapped a six-day winning streak, as investors paused following a run of gains and fresh worries emerged over the US trade war with China.
President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead, unless Beijing agrees to four or five “major points” which he did not specify.
Separately, Trump said he would impose more tariffs on Chinese imports if there was no progress in talks with Chinese President Xi Jinping at the Group of 20 summit later this month.
Stocks were mostly higher in early trading on Tuesday amid lingering optimism over Trump’s decision late on Friday to hold off import tariffs on Mexico.
Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina, said trade sentiment was driving everything.
“What we’re seeing today is the more pessimistic view on what might happen by the end of the month. Most selling in the month of May could be put down to China and Mexico,” he said.
Investors also may be reluctant to push stocks higher without a fresh catalyst for support, some strategists said.
Data showed US producer prices increased solidly for a second straight month in May, in line with expectations of economists polled by Reuters pointing to a steady pickup in underlying inflation pressures.
Industrials and utilities indexes led the way lower Tuesday, with the S&P 500 industrial index falling 0.9 per cent, weighed down by losses in United Technologies and Raytheon.
The Dow Jones Industrial Average fell 14.17 points, or 0.05 per cent, to 26,048.51, the S&P 500 lost 1.01 points, or 0.03 per cent, to 2885.72 and the Nasdaq Composite dropped 0.60 points, or 0.01 per cent, to 7822.57.
Recent optimism over trade tensions and the prospect of an interest rate cut by the Federal Reserve had helped stocks rally in recent sessions. The benchmark S&P 500 is just 2 per cent away from its early May all-time high.
The market is betting the Fed will cut interest rates in July and cut two more times this year as Trump’s hard bargaining on trade with Beijing and others could push the economy back into recession.
United Technologies fell 4 per cent and Raytheon shed 5.1 per cent, a day after Trump gave mixed signals on whether he believed the $US121 billion merger between the companies should go forward. On Monday, Raytheon edged higher while United Technologies lost 3.1 per cent.
The S&P utilities index on Tuesday was down 0.7 per cent.
Symantec fell after Morgan Stanley downgraded the antivirus software maker’s stock, citing increased competition.
Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favoured decliners.
The S&P 500 posted 53 new 52-week highs and three new lows; the Nasdaq Composite recorded 54 new highs and 88 new lows.
Volume on US exchanges was 6.76 billion shares, compared to about 6.92 billion average for the full session over the last 20 trading days.