Stocks finished lower Tuesday as lingering trade tensions pressured sentiment. Top U.S. and Chinese negotiators resumed face-to-face talks, but expectations for a breakthrough were tempered after President Trump increased rhetoric against Beijing. The major averages pared declines, however, on news that President Trump had recently spoken with Chinese President Xi. The Dow dropped 23 points, while the S&P 500 lost 0.3%. The Nasdaq Composite dipped 0.2%.
In earnings, Procter & Gamble climbed 3.8% and reached an all-time high after delivering its best quarterly revenue growth in more than a decade. Merck advanced 1% after delivering a solid quarterly beat amid strength in its cancer-treating Keytruda drug. Under Armour fell 12.2% after the apparel maker forecasted a decline in North American revenue this year. In other corporate news, Capital One slumped 5.9% after 106 million customers were reportedly affected by a data breach.
On the data front, the core PCE deflator, the Fed’s preferred gauge of inflation, rose 1.6% year-over-year in June, above May’s downwardly revised 1.5% pace. Separately, a reading on consumer confidence in July jumped to the highest level since last November. An additional release revealed personal spending increased 0.3% in June, matching expectations. Another report showed pending home sales spiked 2.8% in June, the largest gain in three months. Treasuries strengthened despite the positive economic data updates, with the yield on the 10-year note down one basis point to 2.05%.
In commodities, WTI crude advanced 2.5%, nearing a two-week high of $58.27/barrel amid expectations of increased demand, given tomorrow’s widely anticipated Federal Reserve rate cut.