U.S. stocks ended in the red Wednesday, though off session lows, after a report that a trade deal might not be completed this year and after China condemned a U.S. Senate resolution supporting human rights in Hong Kong.
Wall Street also parsed the minutes of the October meeting of the Federal Reserve’s interest-rate-setting committee, which suggested the bank will not likely change interest rates soon.
How did the major benchmarks fare?
The Dow Jones Industrial Average
fell 112.93 points, or 0.4%, to close at 27,821, while the S&P 500
lost 11.72 points, or 0.4%, to end at 3,108.46. The Nasdaq
, which briefly traded above the neutral line in the late morning, closed 43.92 points lower, or 0.5%, at 8,526.73.
At session lows, the Dow fell 258.74 points, or 0.9%, the S&P 500 shed 28.78 points, also 0.9%, and the Nasdaq lost 102.03 points, or 1.2%.
What drove the market?
Completion of a “phase one” U.S.-China trade deal could slide into next year, Reuters reported, as Beijing presses for more extensive tariff rollbacks and the Trump administration counters with heightened demands of its own.
Earlier, after the U.S. Senate late Tuesday approved a bill to support human rights in Hong Kong following months of often-violent unrest in the semi-autonomous Chinese city, China responded by threatening to take “strong countermeasures” if Congress proceeds with passage of the bill.
Both sides remain divided over core issues — including Beijing’s demand for removing tariffs and the U.S.’s insistence on China buying farm products — nearly six weeks after an “agreement in principle” was announced by the White House on Oct. 11.
On Tuesday, President Donald Trump said at a Cabinet meeting that China needs to make a deal he likes to avoid import tariffs going even higher, with fresh levies set to go into effect Dec. 15, directly hitting American consumers.
“What we’re seeing in the market today is another reminder that tariffs reign supreme,” said TD Ameritrade chief market strategist JJ Kinahan.
“You can have great results from two of the biggest retailers — Target and Lowe’s — but what seems to matter most of all is if headlines go south on trade.”
Meanwhile, Federal Reserve Board Gov. Lael Brainard said she supported a pause in interest-rate policy after the three rate cuts engineered since July, as she expects the U.S. economy should be able to shake off trade uncertainty and continue on a moderate expansion path through 2020.
The Fed also released minutes of its October meeting, when it cut interest rates by a quarter point, the third such action in 2019. The record of the meeting, though, showed that officials were largely in agreement that the central bank won’t cut interest rates again unless U.S. economic conditions deteriorate significantly, and that officials “generally viewed the economic outlook as positive.”
The Fed does expect economic growth to slow in the second half of 2019, “mostly because of continued soft business investment and slower increases in government spending,” according to the minutes.
“The October FOMC meeting minutes were released this afternoon, only reinforcing the message that the committee intends to keep rates on hold for the time being,’ said Bob Miller, head of Americas fundamental fixed income at Blackrock, in an email. “After three consecutive rate reductions, the mid-cycle adjustment is over.”
Which stocks were in focus?
Shares of Target Corp.
roared to a record Wednesday, after the discount retailer reported fiscal third-quarter profit and revenue that rose above expectations, and raised its full-year outlook. The stock gained 14.1% Wednesday.
said net income from its third quarter ending Nov. 1 jumped to $1.05 billion, or $1.36 a share, from $629 million, or 78 cents a share. Shares of the home improvement retailer rose 3.9% Wednesday.
Bristol-Myers Squibb Co.
fell 0.1% after the drug company said a trial of a drug called opdivo plus yervoy in patients who have had surgery to treat melanoma failed to meet its main goal.
Shares of AT&T
fell 2.2%, down for the second straight day, after closing at a long-time high on Monday. Analysts at KeyBanc warned of “further deterioration” in video.
shares extended their rally, up 16.9%, after a steep decline earlier in the week following a Raymond James downgrade. The stock is still down nearly 50% for the week to date.
shares fell 1.2% after announcing Wednesday it has started construction of its new $1 billion, 3-million-square-foot campus in Austin, Texas, which will initially employ 5,000 people. Trump was scheduled to tour the company’s manufacturing facility in Austin on Wednesday.
How did other markets trade?
U.S. Treasury yields edged lower amid doubts on trade, with the yield on the 10-year U.S. Treasury note
declining 5 basis points to 1.732%.
slipped after a gain on Tuesday, with gold for December deliver declining 10 cents, or 0.01%, to settle at $1,474.20 an ounce.
Crude oil prices rose after sinking a day ago. West Texas Intermediate crude for December delivery added $1.90, or 3.4%, to settle at $57.11 a barrel on the New York Mercantile Exchange
The ICE U.S. Dollar Index
, representing a basket of the greenback’s trading rivals, gained 0.1%.
Meanwhile, the Stoxx Europe 600
closed down 0.4%.
In Asia overnight Wednesday, stocks traded mixed, with the China CSI 300
shedding 1%, Japan’s Nikkei 225
falling 0.6% and Hong Kong’s Hang Seng
— Mark DeCambre contributed to this report.