U.S. stocks posted modest losses at the start of trade Wednesday, after markets retreated from record territory Tuesday following comments from President Donald Trump on the lack of progress between Beijing and Washington in the long-running dispute over trade and import tariffs.
How are the major benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.01% fell 34 points, or about 0.1% at 27,302, the S&P 500 index SPX, -0.03% ) fell 2 points, or less than 0.1%, at 3,003, while The Nasdaq Composite index COMP, +0.05% slipped 2 points to reach 8,223, a loss of less than 0.1%.
On Tuesday, the Dow closed 23.50 points lower to 27,335.6, a loss of 0.1%, after briefly touching an intraday high at 27,398.68. The S&P 500 dropped 0.3% to 3,004.0, shedding 10.3 points and the Nasdaq Composite Index edged 0.4% lower, or a 35.4 point drop, to 8,222.80.
What’s driving the market?
Bank of America Corp. BAC, +1.12% the second-largest bank in the U.S. by assets, produced better-than-expected earnings of 74 cents a share, or $7.35 billion, compared with expectations for 71 cents a share based on analysts polled by FactSet. Revenue for the quarter came in slightly below expectations, but the bank raised its dividend by 20%,while announcing an authorization for $30 billion in stock buybacks, helping boost the stock by 1.07% at the open.
On Tuesday, markets skidded slightly lower after President Donald Trump said an agreement with China on trade tariffs had “a long way to go,” and said he could impose the full slate of tariffs on Chinese imports, in a briefing with reporters. He also said his administration would explore national-security concerns related to unsubstantiated allegations about Google-parent Alphabet Inc.’s GOOG, +0.24% GOOGL, +0.23% relationship with Beijing.
“Investors are now concerned a trade deal between the US and China is not going to happen anytime soon after President Trump said he could go ahead with further tariffs hike against Beijing,” wrote Pierre Veyret, technical analyst at ActivTrades.
Stocks pared some premarket gains after data on new building permits came in weaker than expected, falling 6.1% in June to an annual pace of 1.22 million homes, versus the 1.3 million expected by economists, per a MarketWatch poll. Home builders broke ground on new homes at a rate of 1.25 million last month, down 0.9% from May, though above the forecasted 1.24 million homes.
Wall Street participants were also digesting comments from Federal Reserve Chairman Jerome Powell on Tuesday, who implied that the market has already priced in expectations for easing by the central bank. Fed funds futures markets are placing 68% probability of a 25-basis-point cut to rates, which currently stand between 2.25%-2.50%, and a 32% chance of a half-point cut to rates, according to CME Group data. Powell said the Fed was “carefully monitoring” risks to U.S. economy wrought by tariff disputes.
Also in focus will be the Fed’s anecdotal account of business conditions in its regions, with the Beige Book set to be released at 2 p.m.
Which stocks are in focus?
Shares of Abbot Laboratories ABT, +3.90% rose 1.5% after the health-care product manufacturer reported second-quarter earnings that beat analyst forecasts, while raising its guidance for the full year.
CSX Corp. CSX, -8.23% released disappointing second-quarter financial results Tuesday evening, with both income and revenue below Wall Street expectations. Shares fell 6.9%.
Qualcomm Inc. QCOM, +1.85% shares will be in focus Wednesday after the Justice Department filed documents Tuesday that support the chip maker in its appeal against a federal ruling in May that it had violated antitrust laws through licensing practices that thwart competition. The antitrust action was initiated by the Federal Trade Commission. Qualcomm stock rose 4.2%.
United Airlines Holdings Inc. UAL, -1.09% reported better-than-expected second-quarter earnings Tuesday after the close of trade. The stock was up 0.5%.
Shares of Nu Skin Enterprises Inc. NUS, -16.72% tumbled more than 20%, after beauty-and-wellness products distributor issued a profit warning Tuesday evening, pegged to much reduced revenue from China.
After the bell, results from Netflix Inc. NFLX, +0.04% and eBay Inc. EBAY, +0.13% are due.
How are other markets trading?
The yield on the 10-year Treasury note TMUBMUSD10Y, -0.71% was at 2.09%, after touching a four-week high of to 2.12% on Tuesday.
In Asia, the China CSI 300 000300, -0.06% ended with a slight loss of less than 0.1%, Japan’s Nikkei 225 NIK, -0.31% declined 0.3% and Hong Kong’s Hang Seng Index HSI, -0.09% gave up 0.1%. Meanwhile, European shares were trading flat, with the Stoxx Europe 600 SXXP, +0.06% up less that 0.1%.
In commodities markets, crude-oil CLQ19, +0.73% gained 1.2%, while gold prices GCQ19, +0.16% fell 0.4%, adding to Wednesday’s losses.
The U.S. dollar DXY, -0.09% was off 0.1% at 97.32, as measured by the ICE U.S. Dollar Index.
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