New York
US stocks fell on Wednesday after President Donald Trump injected a fresh dose of uncertainty into the outcome of US-China trade talks by suggesting that any possible deal needed “a different structure.” Trump signalled a new direction for the trade talks, saying the current track appeared “too hard to get done”, a day after telling reporters that he was not pleased with the recent talks.
The latest uncertainty comes as investors prepare to assess the Federal Reserve’s May meeting minutes, scheduled for release at 2:00pm. ET, for indications of how many rate hikes are likely this year.
The US central bank lifted borrowing costs in March and policymakers are split between those who expect another two rate hikes this year and those who forecast three, in the backdrop of low unemployment, moderate growth and rising inflation.
“Not only are the trade negotiations in focus but we also have the Fed’s minutes and I expect them to be hawkish,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“A combination of the Fed and the trade worries will make today a rocky session.” At 9:59am. EDT the Dow Jones Industrial Average was down 76.00 points, or 0.31 per cent, at 24,758.41, the S&P 500 was down 8.64 points, or 0.32 per cent, at 2,715.80 and the Nasdaq Composite was down 22.63 points, or 0.31 per cent, at 7,355.82.
US 10-year Treasury yields fell to eight-day lows as investors shunned risk. Of the 11 major S&P sectors, only utilities and real estate, sectors seen as bond proxies due to their high dividend yields, were higher.
Leading the decliners was the financial sector, down 0.9 per cent. Industrials, which as a group are the most sensitive to trade issues, fell 0.5 per cent.
Retailers had a mixed day.
Target sank 5.1 per cent after the retailer’s quarterly profit rose less than expected as increasing investments dented margins.
Tiffany surged 16.2 per cent after the jeweller’s quarterly results blew past estimates and the company also raised its full-year profit forecast and announced a $1 billion share buy-back programme.
Lowe’s gained 9.1 per cent after the home improvement retailer maintained its annual financial targets despite a disappointing first quarter.
Comcast fell 1.7 per cent after the US cable operator said it was preparing to top Disney’s offer for certain Twenty-First Century Fox assets.
Disney dropped 1.2 per cent, while Fox gained 1.1 per cent.
Declining issues outnumbered advancers for a 1.52-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.29-to-1 ratio on the Nasdaq.
The S&P index recorded 2 new 52-week highs and 1 new lows, while the Nasdaq recorded 30 new highs and 17 new lows.
