Banks, industry decline

S&P 500 companies have surged 23 percent in the first half of this year versus the same period a year earlier, according to S&P Global Market Intelligence.

“The market is waiting to see the effect of the tariffs,” said JJ Kinahan, chief market strategist for TD Ameritrade. “It’s hard to argue what’s going on with earnings.”

Of more immediate interest for the market is Friday’s annual gathering of central bankers. Mr. Powell was scheduled to deliver a keynote speech that traders are sure to scrutinize for signs of Fed views on Turkey’s currency crisis and U.S.-China trade tensions. If Mr. Powell sounds confident, investors would likely conclude the Fed will keep gradually raising rates.

Banks and other financial stocks took some of the biggest losses Thursday. Charles Schwab declined 1.5 percent to $50.17. Industrial stocks also fell. Caterpillar lost 2 percent to $136.79.

New housing data also weighed on stocks. The Commerce Department said sales of new U.S. homes slumped 1.7 percent in July, the second monthly decline in a row.

“The backbone of the progress we’ve seen this year so far in the market really is an indication of how strong the economy is in general,” Mr. Springmeyer said. “Housing has probably been the one single piece of economic information to come out recently that has been somewhat disappointing.”

Hormel Foods fell 3.1 percent to $37.33 after the Spam maker cut its sales outlook, partly because of uncertain trade conditions. Other packaged foods companies also declined. J.M. Smucker lost 0.9 percent to $104.45. Campbell Soup slid 1.5 percent to $40.61.

Technology companies led the gainers. Advanced Micro Devices vaulted 6.7 percent to $22.29.

Benchmark U.S. crude settled essentially flat at $67.83 per barrel in New York. Brent crude, used to price international oils, dipped 0.1 percent to $74.73 per barrel in London.