Stocks extended their declines on Tuesday as investors digested downbeat trade headlines. President Trump indicated that he sees no reason to rush a deal with China, noting that it may even be better to wait until after the 2020 U.S. presidential election. Separately, the EU and France said they are prepared to retaliate if Washington moves forward with implementing levies on $2.4 billion of French imports. The Dow slumped more than 450 points during the session, before paring some of the losses to close down 280 points. The S&P 500 retreated 0.7%, while the Nasdaq Composite shed 0.6%.
Amid the trade uncertainty, perceived safe haven assets strengthened. Treasuries rallied, sending the yield on the 10-year note down 11 basis points to 1.71%, touching the lowest level since early November. In commodities, COMEX gold climbed 1.0% to $1,477.00/ounce, while WTI crude reversed an earlier decline, to finish 0.6 % higher at $56.31/barrel.
Eight of 11 S&P 500 sectors ended in negative territory, with the more defensive Real Estate and Utilities groups the only advancers. Energy and Financials led laggards, retreating 1.5% and 1.3%, respectively. The Industrials group, which is widely viewed as a proxy of the ongoing trade dispute, also underperformed, losing 1.1%.
This follows Monday’s session in which the major averages posted their worst day in more than a month amid trade news and a disappointing reading on U.S. manufacturing. President Trump announced the resumption of steel and aluminum tariffs on imports from Brazil and Argentina, while the ISM reported U.S. factory activity contracted for the fourth-straight month in November.