U.S.-China tensions drive market to a loss

Wall Street’s rally ran out of fuel in the last hour of trading Thursday, and the market fell to its first loss in four days amid worries about rising U.S.-China tensions.

The S&P 500 had been climbing for much of the day and was up as much as 1.1 percent at one point. But it all disappeared after President Donald Trump said he’ll hold a news conference about China on Friday. That raised immediate worries among investors about possibly worsening relations between the world’s largest economies, which had signed a deal earafter lier this year to at least pause their trade war.

“The concerns are that this escalates over the course of the summer,” said Quincy Krosby, chief market strategist at Prudential Financial. “It’s like lighting a match.”

The S&P 500 ended the day down 6.40, or 0.2 percent, at 3,029.73. The Dow Jones Industrial Average swung from a gain of 210 points to a loss of 147.63 by the close of trading, down 0.6 percent to 25,400.64. The Nasdaq composite fell 43.37, or 0.5 percent, to 9,368.99.

U.S. and Chinese officials have been trading harsh rhetoric recently on everything from Hong Kong to the response to the coronavirus outbreak. Investors are worried it could lead to another punishing round of escalating tariffs between the two countries, which only would further damage a global economy punished by a severe recession due to the pandemic.

Energy producers and banks fell to some of Thursday’s sharpest losses.

Twitter also lost 4.4 percent. Trump signed an executive order late Thursday to study whether new regulations can be put on social media companies. He has been railing against Twitter after it applied fact checks to two of his tweets.

Earlier in the day, the S&P 500 seemed to be rolling toward its fourth straight gain, which would have been its longest winning streak since before the market began to sell off in February.

Gains for health care stocks helped the S&P 500 at one point climb back within 10 percent of its record high. Johnson & Johnson rose 1.4 percent, Pfizer gained 2.1 percent and Eli Lilly added 3.4 percent.

Dollar Tree jumped 11.6 percent for the largest gain in the S&P 500 the retailer reported stronger revenue and earnings for its latest quarter than Wall Street expected.

A barrel of U.S. crude oil for delivery in July rose 90 cents to settle at $33.71. Brent crude, the international standard, rose 55 cents to $35.29 per barrel.

In an encouraging sign, executives said recent trends have been improving for purchases of discretionary items, such as kitchenware and toys, instead of just essentials for hunkering down.

Even with Thursday’s loss, the S&P 500 still is on pace for its third weekly gain of at least 2.5 percent in the past four weeks.