Stocks erased early gains to finish lower Tuesday. Investors continued to assess trade updates and a decline in Treasury yields. The Dow dropped 237 points on the heels of its five-week losing streak. The S&P 500 lost 0.8%, while the Nasdaq Composite was down 0.4%.
Yesterday, President Trump said he was “not yet ready” to make a deal with China. Beijing also hinted that it could restrict the use of precious metals required by chipmakers. Treasuries rallied as investors sought perceived safe haven assets, with the yield on the 10-year note falling four basis points to 2.27%, the lowest since late 2017. Meanwhile, the yield curve between the 10-year note and the three-month T-bill inverted for the third time this year.
10 of 11 S&P 500 sectors closed in negative territory, with the Communication Services group the sole advancer. In M&A news, Global Payments dipped 0.4% to $21.37 after announcing the acquisition of rival Total System Services in a $21.5 billion stock deal. Fiat Chrysler shares climbed 7.2% to $13.78 on news the company is seeking a “merger of equals” with Renault that would create the world’s third largest automaker.
Breadth was negative on issues by 3:1 on the NYSE and 9:5 on the Nasdaq. Composite NYSE volume totaled more than 4.0 billion shares.
On the data front, a reading on consumer confidence came in above expectations in May, hovering near an 18-year high. The S&P CoreLogic Case-Schiller survey revealed housing price gains in 20 U.S. cities slowed for a 12th consecutive month in March.