Stocks on Wall Street fell broadly Friday as investor jitters over the heated U.S.-China trade war overshadowed encouraging developments in conflicts between the United States and other key trading partners.
The sell-off gained strength in the last hour of trading, handing the benchmark Standard & Poor’s 500 index its second weekly loss in a row.
News that the United States reached a deal with Canada and Mexico to scrap tariffs imposed by the Trump administration last year on imported steel and aluminum failed to cheer up investors. Nor did word earlier in the day that President Trump has delayed for six months a decision on taxing imported cars and auto parts as trade negotiations continue with the European Union and Japan.
Those developments took a back seat to growing uncertainty over how the United States and China will resolve their costly trade dispute, which has escalated the last two weeks. On Friday, published reports noted that Chinese state media was sending signals that appeared to dim the prospects for progress in the next round of negotiations.
“You had the good news in the delay in the auto tariffs, but the bad news is it’s going to be a long slog with high tariffs on China,” said Tom Martin, senior portfolio manager with Globalt Investments.
The S&P 500 ended down 16.79 points, or 0.6%, at 2,859.53 after a day of wavering. After all its movement the last two weeks, the index remains 2.9% below the record high it set last month.
The Dow Jones industrial average fell 98.68 points, or 0.4%, to 25,764. The Nasdaq composite slid 81.76, or 1%, to 7,816.28. The Russell 2000 index of smaller-company stocks declined 21.48 points, or 1.4%, to 1,535.76.
This week, the S&P 500 posted its second-worst day of the year and then three straight gains, only to falter Friday.
Escalating tensions between the world’s two largest economies have upended the calm that dominated markets earlier this year, when a U.S.-China trade agreement seemed to be in the works. The S&P 500 has twice had a single-day drop of 1.5% in the last two weeks, as many times as it had in the first four months of the year.
Market swings within the course of a single day have become common in recent weeks as investors react to developments in the United States’ trade disputes with other countries, primarily China. Trump made good on a threat to raise tariffs on Chinese-made products, and China retaliated with higher tariffs on U.S. goods. The threats were interspersed with some signs of reconciliation.
Although the Trump administration has been pressing for change in trade terms with the European Union, Japan, Canada and Mexico, the market has remained focused mainly on the U.S.-China trade war, which has been getting more heated.
The Trump administration has issued an executive order aimed at banning Huawei equipment from U.S. networks. Another sanction that subjects the Chinese telecommunications giant to strict export controls took effect Thursday. China has threatened to retaliate. It remains to be seen how the move will affect trade negotiations, which are expected to continue.
“The trade issue could still get worse before it gets better, but our view remains that a deal will ultimately be reached to resolve the issue given the economic (and in Trump’s case political) damage that would be caused if a deal is not reached,” Shane Oliver of AMP Capital said in a commentary.
Technology and industrial stocks took some of the heaviest losses Friday. Utilities eked out a slight gain.
Deere slid 7.7% — the biggest decliner in the S&P 500 — after the tractor maker cut its profit forecast for the year, citing factors including slower sales from farmers worried about exports.
The U.S. crackdown on Huawei Technologies continued to weigh on chipmakers that supply the Chinese telecom company. Qorvo dropped 6.1%. Skyworks Solutions slid 4.8%. Micron Technology fell 3.4%.
Pinterest dived 13.5% after the digital pinboard company reported a larger loss for the latest quarter than analysts expected. Its shares began trading last month.
Tesla slid 7.6% after reports said Chief Executive Elon Musk will scrutinize costs as the electric vehicle maker seeks to save money.
A report showing that U.S. shoppers remain more confident than economists expected helped spur a brief midmorning rally. The yield on the 10-year Treasury fell as low as 2.36% Friday morning from 2.40%. It recovered to 2.39%.
Energy futures finished lower. Benchmark U.S. crude slipped 0.2% to $62.76 a barrel. Brent crude, the international standard, fell 0.6% to $72.21 a barrel.
Wholesale gasoline fell 0.7% to $2.05 a gallon. Heating oil fell 1.3% to $2.10 a gallon. Natural gas fell 0.3% to $2.63 per 1,000 cubic feet.
Gold fell 0.8% to $1,275.70 an ounce. Silver slid 1% to $14.39 an ounce. Copper fell 0.3% to $2.74 per pound.