U.S. stocks closed lower on Tuesday as market participants awaited updates on U.S.-China trade negotiations, though retail sector performance limited broader declines. The S&P 500 index struggled to maintain its recent gains, while the Dow Jones Industrial Average posted its steepest one-day drop in nearly a month.
U.S. Secretary of State Mike Pompeo emphasized during an interview that President Donald Trump would reject any trade agreement that failed to meet stringent criteria, though he reiterated the administration's commitment to reaching a deal. This stance contributed to market uncertainty as investors weighed potential outcomes of the ongoing talks.
The S&P 500 had briefly surpassed the 2,800 threshold last week, its highest level since November 8, but failed to sustain momentum. The index remained 5% below its September 2019 record closing high, supported by Federal Reserve policy signals and optimism about a potential trade resolution.
Strong earnings reports from retailers provided some relief. Target Corp rose 5.1% and Kohl’s Corp gained 5.8% after both companies exceeded profit forecasts. These results, alongside a 0.33% increase in Amazon.com Inc’s shares, boosted the consumer discretionary sector by 0.49%.
At 10:03 a.m. EDT, the Dow Jones Industrial Average fell 8.17 points to 25,811.48, the S&P 500 declined 2.57 points to 2,790.24, and the Nasdaq Composite dropped 7.31 points to 7,570.25. Eight of the 11 major S&P sectors closed lower, with financial stocks leading the decline.
Other notable movements included a 14.6% surge in Ctrip.com International shares after the travel company exceeded revenue expectations, while Align Technology Inc. fell 6.7% following a profit warning. Economic data showed a stronger-than-expected non-manufacturing activity index and a seven-month high in new single-family home sales, though housing market weakness persisted.
