Wall Street indices declined on Monday following a weaker-than-expected U.S. construction spending report, as investors adjusted positions amid shifting trade optimism. The drop came after a rally fueled by expectations of a U.S.-China trade deal, which had driven markets higher since late December.
U.S. construction spending fell unexpectedly in December, with declines in both private and public sector investments, prompting economists to revise downward their fourth-quarter economic growth projections. The data contrasted with earlier optimism about a potential trade truce between the world’s two largest economies.
Stocks initially rose during the session after reports of potential U.S.-China trade negotiations at a March 27 summit, but later reversed course. The S&P 500 remained up about 11% in 2019, though profit-taking intensified as traders locked in gains amid uncertainty over the trade deal’s timeline.
Alicia Levine, BNY Mellon’s chief strategist, noted that the market had already priced in trade deal expectations, leading to profit-taking. She added that while a deal could still drive gains, current sentiment was cautious. "The market expects a trade deal with China, so there is a little bit of sell on the news here," she said.
The Dow Jones Industrial Average fell 1% to 25,766.58, the S&P 500 dropped 0.68% to 2,784.68, and the Nasdaq declined 0.58% to 7,550.95. Ten of 11 major S&P 500 sectors ended lower, with healthcare leading declines as UnitedHealth Group shares fell 3.9%.
AT&T shares dropped 2.8% after the company announced restructuring of its WarnerMedia division, according to an internal memo. Market analysts highlighted the 2,800 threshold for the S&P 500 as a critical level, with the index reaching a session high of 2,816.88 before retreating.
Trading volumes reflected mixed sentiment, with declining issues outpacing advances on both the NYSE and Nasdaq. The S&P 500 recorded 40 new 52-week highs, while the Nasdaq saw 77 new highs and 25 new lows.
