NEW YORK, Nov 13 — Wall Street edged lower today as President Donald Trump’s threat to “substantially” raise tariffs if China did not make a trade deal with the United States as well as escalating tensions in Hong Kong kept investors away from riskier assets.
Trump yesterday dangled the prospect of completing an initial deal with China “soon,” but offered no new details on negotiations and largely repeated well-worn rhetoric about China’s “cheating” on trade.
Technology stocks had lifted the benchmark S&P 500 and Nasdaq to all-time highs in the run up to Trump’s speech yesterday, but the indexes pulled back slightly after his address at the Economic Club of New York.
“Now is more the realisation that ‘phase one’ is really not a done deal,” said Art Hogan, chief market strategist at National Securities in New York.
“It felt for a couple weeks that the deal was almost done and then you have these comments that sort of puts us in the same place we were.”
Eight of the 11 major S&P 500 sectors were lower. The financial sector fell 0.65 per cent, tracking a drop in benchmark 10-year US Treasury yields and weighing the most.
The trade-sensitive industrial sector was also among the biggest drags, while the Philadelphia Semiconductor index fell 0.87 per cent.
Heightened tensions in Hong Kong also dulled sentiment after police warned violence related to anti-government protests had reached a deadly level and that the Asian financial hub had been pushed to the “brink of a total breakdown”.
Wall Street’s main indexes have touched new highs this month on the back of a strong corporate earnings season and hopes of a trade deal to end the damaging 16-month tariff war.
US central bankers see a “sustained expansion” ahead for the country’s economy, with the full impact of recent interest rate cuts still to be felt, Federal Reserve Chair Jerome Powell said in his prepared remarks for testimony that is scheduled to begin at 11am ET (1600 GMT).
On the economic front, data showed US consumer prices rebounded more than expected in October and underlying inflation picked up.
At 10.03am ET the Dow Jones Industrial Average was down 16.71 points, or 0.06 per cent, at 27,674.78, the S&P 500 was down 4.11 points, or 0.13 per cent, at 3,087.73 and the Nasdaq Composite was down 16.84 points, or 0.20 per cent, at 8,469.26.
Shares of Alibaba Group Holding Ltd slipped 1.2 per cent as the Chinese e-commerce giant revealed plans to launch a Hong Kong share sale to raise up to US$13.4 billion.
SmileDirectClub Inc slumped 19 per cent as the teeth alignment company posted a bigger quarterly loss and pointed towards more losses for the year.
Tech Data Corp gained four per cent after announcing private equity Apollo Global Management would buy the US company in a deal valued at US$5.4 billion.
China’s Luckin Coffee Inc rose 13.2 per cent as the Starbucks Corp rival reported a smaller-than-expected loss and forecast fourth-quarter revenue above estimates.
Declining issues outnumbered advancers for a 1.67-to-1 ratio on the NYSE and a 1.89-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and one new lows, while the Nasdaq recorded 34 new highs and 55 new lows. — Reuters