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U.S. stocks ended in the red Wednesday, though off session lows, after a report that a trade deal might not be completed this year and after China condemned a U.S. Senate resolution supporting human rights in Hong Kong.
Wall Street also parsed the minutes of the October meeting of the Federal Reserve’s interest-rate-setting committee, which suggested the bank will not likely change interest rates soon.
How did the major benchmarks fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.78% fell 112.93 points, or 0.4%, to close at 27,821, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.59% lost 11.72 points, or 0.4%, to end at 3,108.46. The Nasdaq /zigman2/quotes/210598365/realtime COMP +2.21% , which briefly traded above the neutral line in the late morning, closed 43.92 points lower, or 0.5%, at 8,526.73.
At session lows, the Dow fell 258.74 points, or 0.9%, the S&P 500 shed 28.78 points, also 0.9%, and the Nasdaq lost 102.03 points, or 1.2%.
What drove the market?
Completion of a “phase one” U.S.-China trade deal could slide into next year, Reuters reported , as Beijing presses for more extensive tariff rollbacks and the Trump administration counters with heightened demands of its own.
Earlier, after the U.S. Senate late Tuesday approved a bill to support human rights in Hong Kong following months of often-violent unrest in the semi-autonomous Chinese city, China responded by threatening to take “strong countermeasures” if Congress proceeds with passage of the bill.
Both sides remain divided over core issues — including Beijing’s demand for removing tariffs and the U.S.’s insistence on China buying farm products — nearly six weeks after an “agreement in principle” was announced by the White House on Oct. 11.
On Tuesday, President Donald Trump said at a Cabinet meeting that China needs to make a deal he likes to avoid import tariffs going even higher, with fresh levies set to go into effect Dec. 15, directly hitting American consumers.
“What we’re seeing in the market today is another reminder that tariffs reign supreme,” said TD Ameritrade chief market strategist JJ Kinahan.
“You can have great results from two of the biggest retailers — Target and Lowe’s — but what seems to matter most of all is if headlines go south on trade.”
Meanwhile, Federal Reserve Board Gov. Lael Brainard said she supported a pause in interest-rate policy after the three rate cuts engineered since July, as she expects the U.S. economy should be able to shake off trade uncertainty and continue on a moderate expansion path through 2020.
The Fed also released minutes of its October meeting, when it cut interest rates by a quarter point, the third such action in 2019. The record of the meeting, though, showed that officials were largely in agreement that the central bank won’t cut interest rates again unless U.S. economic conditions deteriorate significantly, and that officials “generally viewed the economic outlook as positive.”