US stocks have slipped after three straight sessions of gains, as trade tensions were renewed when Chinese media took a hardline approach to the tariff dispute between the United States and China.
The trade war will only make China stronger and will never bring the country to its knees, the ruling Communist Party’s People’s Daily wrote in a front-page commentary.
Beijing’s higher tariffs on US products on a $US60 billion target list will take effect on June 1, which could prompt Washington to go ahead with tariffs on a further $US300 billion worth of Chinese goods.
The two sides are expected to meet in China to resume talks soon.
Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said mounting trade worries and geopolitical tensions are weighing on investors’ nerves.
“The trade war tensions are overcoming the positive in markets so investors are skeptical and markets are caught in a trading range,” he said.
The escalating tensions between the world’s two largest economies led farm equipment maker Deere & Co to cut its full-year forecast, sending its shares down 4.3 per cent.
The drop in shares of Deere, as well as Caterpillar and 3M, pressured the tariff-sensitive industrial sector, which was trading 0.7 per cent lower.
Technology companies including iPhone maker Apple and chipmakers, which rely on China for a large portion of their revenue, were also hit by trade fears.
Apple fell nearly 1.2 per cent, also weighed down by Nomura Instinet’s price target cut on its stock, citing headwinds from the tariff war.
The Philadelphia chip index slipped 0.2 per cent, while the broader technology sector fell 0.4 per cent, weighing the most on the S&P 500.
All three major indexes have posted gains three days in a row this week as upbeat quarterly results and a batch of strong economic data helped ease worries of a global economic slowdown.
The S&P 500 index is now about 3 per cent away from its record high hit earlier this month.
At 9.42am local time, the Dow Jones Industrial Average was down 90.51 points, or 0.35 per cent, at 25,772.17, the S&P 500 was down 11.56 points, or 0.40 per cent, at 2864.76 and the Nasdaq Composite was down 36.74 points, or 0.47 per cent, at 7861.31.
Among stocks, Applied Materials gained 4.9 per cent, the most among S&P companies, after the chip gear maker’s upbeat third-quarter profit eased concerns about waning chip demand.
Under Armour rose 4.6 per cent after JP Morgan upgraded the sports wear maker to “overweight” from “neutral”.
Online scrapbook company Pinterest slumped 13.7 per cent after the recent Wall Street debutant forecast 2019 revenue broadly in line with Wall Street targets.
Also on investors’ radar is the debut of Luckin Coffee, the Chinese challenger to Starbucks.
Declining issues outnumbered advancers for a 3.56-to-1 ratio on the NYSE and a 2.63-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and five new lows, while the Nasdaq recorded 14 new highs and 39 new lows.