U.S. stocks fall for third straight day
Market drops after Trump says he has “no deadline” for trade deal
Stocks closed broadly lower and bond prices rose sharply on Wall Street Tuesday after President Donald Trump cast doubt over the potential for a trade deal with China this year.
Technolog y companies, banks and industrial stocks accounted for much of the sell-off, which extended the S&P 500’s losing streak to a third day. Utilities and real estate stocks rose as traders favored less-risky assets.
Trump said he has “no deadline” for a trade deal and doesn’t mind waiting until after the
2020 election to make one. Investors had been hoping for a deal this year, or at least enough progress to stave off new U.S. tariffs on Chinese goods, including smartphones and laptops, scheduled to start Dec. 15.
Tensions between the two nations f lared anew last week after Trump signed legislation expressing U.S. support for pro-democracy demonstrators in Hong Kong.
“We’re running out of time and the markets are finally woken up to ‘Hey, there’s a risk out there and maybe things aren’t going to be all good after all,’” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.
The S&P 500 index fell 20.67 points, or 0.7 percent, to 3,093.20. The Dow Jones Industrial Average lost 280.23 points, or 1 percent, to 27,502.81. The index was brief ly down 457 points.
The Nasdaq dropped 47.34 points, or 0.6 percent, to 8,520.64. The Russell 2000 index of smaller company stocks gave up 4.95 points, or 0.3 percent, to 1,602.63.
Pressure has been building on Washington and Beijing to complete what Trump has called a limited “Phase 1” deal before the new tariffs on Chinese goods kick in Dec. 15.
“We’re less than two weeks away from new tariffs that will be implemented on a bunch of consumer goods that have never had tariffs on them, and I think that ’s when the consumer really starts to feel the pain,” Frederick said.
Wall Street is also weighing the potential for an expanded series of trade disputes. On Tuesday, Trump proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Google, Amazon and Facebook. That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil.
The lack of a trade deal before the year ends could mean the market is in for a turnaround from a strong, record-setting November. The S&P 500 had its best month since June with a 3.4 percent gain because of cooling trade tensions and optimism that a resolution to the dispute was near.
Two days of def lated hopes have already sent the S&P 500 about 1.5 percent lower and the tech-heav y Nasdaq has slipped 1.7 percent.
December is a ty pically solid month for the stock market, with the S&P 500 making gains regularly since the last recession ended in 2009. Last year, though, fears about a recession and rising interest rates hurt the major indexes.