U.S. stocks fall for 3rd straight day over more trade worries
Investors had been hoping for a deal with China this year
Stocks closed broadly lower and bond prices rose sharply on Wall Street on Tuesday after President Donald Trump cast doubt over the potential for a trade deal with China this year.
Technology 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 flared 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%, to 3,093.20. The Dow Jones Industrial Average lost 280.23 points, or 1%, to 27,502.81. The index was briefly down 457 points.
The Nasdaq dropped 47.34 points, or 0.6%, to 8,520.64. The Russell 2000 index of smaller company stocks gave up 4.95 points, or 0.3%, to 1,602.63.
Stocks have been racking up losses this week, giving up some of the market’s solid gains from a strong November rally fueled partly by investor optimism about the prospects for a trade deal between Washington and Beijing.
The lack of a trade deal before the year ends could mean the market is in for a turnaround from a strong, recordsetting November.