Industrial companies led a broad slide in stocks on Wall Street on Tuesday, ending the benchmark Standard & Poor’s 500 index’s eight-day winning streak.
The sell-off came as traders weighed growing trade tensions between the United States and the European Union and digested a report forecasting dimmer global economic growth this year.
Banks and technology companies also lost ground. Only utilities and the communications services sector — a broad category that includes entertainment, telecommunications and internet companies — notched gains.
Smaller-company stocks fell more than the rest of the market. Bond prices rose, sending yields down, as investors moved money into the traditionally safer holdings. The price of gold rose.
Tuesday’s wave of selling marks a reversal for the market, which has been moving decidedly upward in recent weeks. More news is on tap this week, as the latest round of corporate earnings reports kicks off Wednesday with Delta Air Lines. Several banks, including JPMorgan Chase, will release their first-quarter results Friday. Analysts expect quarterly earnings for S&P 500 companies to decline for the first time in almost three years.
“We’re in the later stages of the economic cycle, so earnings are definitely needed to keep the momentum going,” said Jennifer Green, global investment specialist at J.P. Morgan Private Bank. “We’ve seen a very nice run so far year-to-date, so the next stage is listening to how the earnings come in and the outlook and the guidance that these companies give us.”
The S&P 500 index fell 17.57 points, or 0.6%, to 2,878.20. The Dow Jones industrial average slid 190.44 points, or 0.7%, to 26,150.58. The Nasdaq composite fell 44.61 points, or 0.6%, to 7,909.28. The Russell 2000 index of small-cap stocks declined 19.32 points, or 1.2%, to 1,559.68.
European indexes also finished broadly lower, giving up early gains, after the United States threatened to impose $11.2 billion in tariffs on European products, including cheese, wine and helicopters.
The threat from President Trump could make investors even more concerned about trade disputes hurting an already slowing global economy at a time when the United States is trying to resolve its trade conflict with China.
The U.S.-China spat has already made a wide variety of goods more expensive for consumers and is weighing on an already slowing Chinese economy. Negotiators met again last week, and both sides have said they are making progress.
Traders also were disappointed that the International Monetary Fund lowered its forecast for global growth this year. The IMF now projects 3.3% global growth in 2019, matching the weakest year since 2009. The United States fared particularly poorly in the report, with growth now expected at 2.3%, down from 2.9% in 2018.
Even against the backdrop of slowing global economic growth and a global trade war, U.S. stocks are off to a blockbuster start this year. The S&P 500 now sits just 1.8% away from its most recent record high, which was set in September. The index just had its best quarter in nearly a decade, rising 13.1% in the first three months of the year, and has since climbed further.
The Federal Reserve helped fuel that first-quarter rise: It eased fears about a recession by saying it may not raise interest rates at all in 2019.
Investors will get more clues about the Fed’s intentions Wednesday, when the central bank releases minutes from its latest policy meeting. The European Central Bank will also meet Wednesday.
Pentair led the sell-off in industrial stocks Tuesday, diving 13.5% after the maker of pool and other aquatic products slashed its profit forecast for the year. Cold and wet weather weighed down sales in the first quarter for the company’s pool equipment, which includes filters and pumps. The firm also sells equipment used for wells and water treatment facilities.
American Airlines Group fell 1.7% after the airline cut a key revenue measure because of grounded flights amid Boeing’s 737 Max troubles. Regulators grounded the 737 Max jets after two deadly international crashes within five months. The grounded planes include 24 in American Airlines’ fleet. In announcing the lower revenue estimate, the airline also cited the lingering effect of the federal government’s partial shutdown.
Wynn Resorts slid 3.9% after the casino operator pulled out of a potential buyout of Australia’s Crown Resorts. The company cited the “premature disclosure of preliminary discussions” as the reason.
Bond prices rose, sending yields down. The yield on the benchmark 10-year Treasury fell to 2.50% from 2.52%.
Energy futures ended mostly lower. Benchmark U.S. crude fell 0.7% to $63.98 a barrel. Brent crude fell 0.7% to $70.61 a barrel.
Wholesale gasoline rose 0.6% to $2 a gallon. Heating oil fell 0.6% to $2.04 a gallon. Natural gas fell 0.3% to $2.70 per 1,000 cubic feet.
The dollar fell to 111.11 yen from 111.53 yen. The euro strengthened to $1.1267 from $1.1261.
Gold rose 0.5% to $1,308.30 an ounce. Silver was little changed at $15.21 an ounce. Copper edged up 0.1% to $2.93 a pound.