U.S. stocks sank again Wednesday as investors worried about tariffs and rising trade tensions. That hurt industrial companies, while banks slumped along with interest rates.
Stocks rose in the morning as investors looked for a rebound from the previous day's losses, but with European leaders warning about the risks of trade disputes, indexes gradually headed down. Boeing and other industrial companies, including airlines and defense companies, took some of the worst losses.
Stocks have bounced around since President Trump announced his tariff plans at the start of this month. They slumped at first, then came back after the Trump administration said it would grant exemptions to some countries. Stocks have slipped over the last two days as investors considered the possibility of greater trade tensions with Europe and China.
"Since the correction [when stocks fell 10% in late January and early February], investors have been a little bit more sensitive to risk," said Karyn Cavanaugh, senior market strategist at Voya Investment Strategies.
Bank stocks fell Wednesday along with bond yields. Declining yields force down interest rates on loans such as mortgages, which hurts banks' profits.
Household goods companies also fell, and department stores and other retailers lost ground after the Commerce Department said retail sales declined in February.
The S&P 500 index fell 15.83 points, or 0.6%, to 2,749.48. The Dow Jones industrial average sank 248.91 points, or 1%, to 24,758.12. The Dow is composed of 30 large multinational companies, some of which will feel a pinch from higher metals costs or from tariffs that may be placed on U.S.-made goods.
The Nasdaq composite slipped 14.20 points, or 0.2%, to 7,496.81. The Russell 2000 index of smaller-company stocks fell 7.74 points, or 0.5%, to 1,584.31.
European Union head Donald Tusk urged Trump to pursue more cooperation with Europe instead of putting tariffs on European goods. The EU wants an exemption from the tariffs on aluminum and steel imports that Trump recently announced and has said it could retaliate with tariffs of its own.
German Chancellor Angela Merkel said she can't predict if those talks will succeed.
Aerospace and defense giant Boeing slid 2.5% to $330.26. Arconic, which uses a lot of aluminum in making products for aerospace companies, fell 3.6% to $24.06. Defense contractors including Raytheon also declined, as did airlines.
Cavanaugh said a trade war is unlikely because the Trump administration is unlikely to take steps that seriously harm global trade. Although investors have sold industrial stocks, she said it's possible some of them will benefit from changes to the North American Free Trade Agreement or other trade agreements.
"You have to be careful when you're trying to Washington-proof your portfolio because you don't know what's going to happen," she said.
Bond prices climbed, sending yields down. The yield on the 10-year Treasury note fell to 2.82% from 2.84%. Citigroup shares fell 1.9% to $73.47. Bank of New York Mellon shares fell 2% to $54.87.
Retail sales slipped 0.1% last month as car sales declined, and so did purchases at gas stations and department stores, the Commerce Department reported Wednesday. Kohl's shares slid 2.9% to $62.25, and discount retailer Dollar Tree fell 1.7% to $92.81.
The Commerce Department said shoppers spent more money online and at catalog retailers. Spending at restaurants, clothiers and building materials stores also increased.
Signet Jewelers plunged 20.2% to $38.22 after the jewelry retailer gave profit and sales forecasts that were weaker than analysts expected. Signet also said it intends to cut at least $200 million in spending and will sell its non-prime credit receivables. It will take a loss of about $170 million on that sale.
Tesla declined 4.5% to $326.63 after Bloomberg News reported that a second senior finance executive resigned. Bloomberg said Treasurer Susan Repo left to become chief financial officer at another company. A week ago, the electric car maker said Chief Accounting Officer Eric Branderiz left "for personal reasons." Separately, CNBC reported that Tesla is having problems manufacturing some parts for its highly anticipated Model 3 sedan.
Twitter jumped 7.3% to $36.60, its highest price since 2015.
Benchmark U.S. crude rose 25 cents to $60.96 a barrel in New York. Brent crude, used to price international oils, rose 25 cents to $64.89 a barrel in London.
Wholesale gasoline rose 4 cents to $1.92 a gallon. Heating oil rose 1 cent to $1.89 a gallon. Natural gas fell 6 cents to $2.73 per 1,000 cubic feet.
Gold slipped $1.50 to $1,325.60 an ounce. Silver fell 9 cents to $16.54 an ounce. Copper rose 2 cents to $3.16 a pound.
The dollar fell to 106.25 yen from 106.61 yen. The euro fell to $1.2375 from $1.2397.
In overseas markets, France's CAC 40 lost 0.2%. The British FTSE 100 slipped 0.1%. Germany's DAX edged up 0.1%. Japan's benchmark Nikkei 225 dropped 0.9%, South Korea's Kospi fell 0.3%, and Hong Kong's Hang Seng lost 0.5%.
2:05 p.m.: This article was updated with closing prices, context and analyst comment.