U.S. stocks came off intraday highs to close lower Tuesday, with the Dow snapping a six-day win streak, as investors digested a new round of posturing on the U.S.-China trade standoff even amid more signs of global economic stimulus.
How did the benchmarks fare?
The Dow Jones Industrial Average DJIA, -0.05% fell 14.17 points to 26,048.51, coming off its longest string of gains since May 2018. The S&P 500 index SPX, -0.03% lost 1.01 points to 2,885.72 and the Nasdaq Composite Index COMP, -0.01% shed 0.60 point to 7,822.57.
At session highs, the Dow had risen 0.7%, the S&P had climbed 0.8%, and the Nasdaq rallied 1.1%
What drove the market?
Wall Street got a bump early in the session after Chinese authorities backed special-purpose bond issuances by local governments. The move is an effort to accelerate financing of major projects through the bond issuances, which are used largely for infrastructure investment, the People’s Bank of China said in a joint statement with other government agencies, The Wall Street Journal reported.
But unresolved trade tensions hung over the market as China’s foreign ministry on Tuesday said it would respond firmly if the U.S. insisted on escalating its standoff with China, Reuters reported.
The report follows comments from President Donald Trump on Monday that further tariffs on Chinese imports would take effect if the two countries don’t reach a deal at a meeting of Group of 20 leaders later this month.
U.S. Commerce Secretary Wilbur Ross said in an interview on CNBC that he believes a deal will ultimately be reached, but cautioned investors not to expect a quick resolution.
The National Federation of Independent Business said its Small Business Optimism Index posted a May reading of 105, up 1.5 points from April.
The prices of wholesale goods rose 0.1% in May from April, down from the 0.2% rise in the previous month, underscoring the lack of inflation pressures in the U.S. economy, according to the producer-price index data. The increase in wholesale prices over the past year, meanwhile, slowed to 1.8% from 2.2% in April,
What were analysts saying?
China’s move to add more stimulus “is a sign the pivot isn’t just a U.S. central bank phenomenon and that there is stimulus in the ramping up globally,” said Eric Wiegand, senior portfolio manager at U.S. Bank.
Read: Why the path for stocks and other markets now depend ‘critically on politics’
“There’s a lateral move with a positive modest bias,” right now, he said. “We’re still rangebound. It wouldn’t be surprising to see more volatility around the G-20 meeting, as investors ask ‘will they or won’t they’” make a deal, he added.
What stocks were in focus?
Private-equity giant Apollo Global Management LLC APO, +0.27% will acquire the online photo sharing company Shutterfly Inc. SFLY, +0.94% in an all-cash deal worth $51 a share, valuing the company at $2.1 billion. Shares of Apollo Global edged up 0.3% and Shutterfly stock rose 0.9%.
Shares of CVS Health Corp. CVS, -1.93% fell 1.9% after the New York Post reported that a federal judge appears to be nearing a surprise move to block CVS’ $69 billion acquisition of Aetna, completed last year.
Shares of H&R Block Inc. HRB, +3.12% rose 3.1% after the tax preparation services company reported fiscal fourth-quarter profit and revenue that beat expectations, boosted its dividend and announced the acquisition of Wave Financial Inc., a small-business financial solutions platform.
Broadcom Inc. AVGO, +1.17% shares gained 1.2% after the company disclosed a two-year deal with Apple Inc. AAPL, +1.16% to provide components.
Shares of Chico’s FAS Inc. CHS, +8.21% jumped 8.2% after the women’s apparel retailer reported disappointing same-store sales growth for the first quarter, but beat earnings and revenue that topped expectations.
Beyond Meat Inc. BYND, -25.02% stock sank 25% after J.P. Morgan analyst Ken Goldman cut his rating on the stock from overweight to neutral, citing valuation concerns. The stock has risen 265% since its May 3 initial public offering.
Shares of JetBlue Airways Corp. JBLU, +4.60% rallied 4.6% after Citi analyst Kevin Crissey published a bullish note on the firm.
How were other markets trading?
Stocks in Asia were in rally mode, with China’s Shanghai Composite Index surging 2.6%, Hong Kong’s Hang Seng Index adding 0.8% and Japan’s Nikkei 225 rising 0.3%. European markets also gained on the hope of Chinese stimulus.
In commodities markets, crude oil CLN19, -2.87% was pressured, while the price of gold GCN19, +0.62% settled higher and the U.S. dollar DXY, +0.02% was virtually unchanged.