U.S. stocks fell on Wednesday as potential U.S. restrictions on Chinese telecom companies reinforced investor concerns about worsening trade relations between the United States and China.
Wall Street’s major indexes had briefly moved higher after the Federal Reserve left interest rates unchanged in its policy announcement on Wednesday but gave up gains as the session progressed.
Stocks slid even further on the news that U.S. President Donald Trump is considering issuing an executive order restricting certain Chinese companies from selling telecommunications equipment in the United States.
The Dow Jones Industrial Average fell 174.07 points, or 0.72 percent, to 23,924.98, the S&P 500 lost 19.13 points, or 0.72 percent, to 2,635.67 and the Nasdaq Composite dropped 29.81 points, or 0.42 percent, to 7,100.90.
Trade relations between the United States and China have already been strained as Trump has weighed imposing tariffs on up to $150 billion of Chinese imports. A Trump administration delegation is scheduled to visit Beijing on Thursday and Friday for talks with top Chinese officials.
The specter of deteriorating U.S.-China trade relations has weighed on Wall Street over the past few weeks.
“It’s hard to see investors willing to take increasing risk ahead of a couple more weeks of trade discussions and negotiations to come,” said Matthew Miskin, market strategist at John Hancock Investments in Boston.
The Federal Open Market Committee’s unanimous decision to keep its lending rate in a target range of between 1.50 percent and 1.75 percent offered fleeting relief to investors.
The Fed expressed a confident economic outlook, saying activity had expanded at a moderate rate and that inflation was close to its 2 percent target. It is expected to increase rates in June.
Snap Inc shares plunged 21.9 percent after the Snapchat owner fell short of Wall Street forecasts for revenue and regular users.
PayPal Holdings Inc shares tumbled 4.1 percent after Bloomberg reported that Amazon Inc is offering retailers discounts to adopt its payment system.
Biotechnology stocks also took a hit as shares of Gilead Sciences Inc dropped 7.8 percent after the company reported a lower quarterly profit on falling sales of its flagship hepatitis C drugs.
Shares of insurers MetLife Inc, American International Group and Prudential Financial Inc declined after disability insurance provider Unum Group reported a lower-than-expected profit. Unum shares fell 17.0 percent.
On the other end of the spectrum, Apple Inc shares rose 4.4 percent after the company late Tuesday posted resilient iPhone sales in the face of waning global demand and promised $100 billion in additional stock buybacks.
Optics firm Lumentum Holdings Inc, an Apple supplier, climbed 11.1 percent after reporting quarterly results earlier on Wednesday.
Mastercard Inc rose 3.1 percent after it reported a better-than-expected quarterly profit, boosted by higher consumer spending on credit and debit cards.
Declining issues outnumbered advancing ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and 23 new lows; the Nasdaq Composite recorded 81 new highs and 45 new lows.
Volume on U.S. exchanges was 7.27 billion shares, compared with the 6.55 billion-share average for the full session over the last 20 trading days.
Canadian market
The Toronto Stock Exchange’s S&P/TSX rose 9.00 points, or 0.06 percent, to 15627.93.
The biggest contributor to the TSX gain was Toronto Dominion Bank with 6.82 net index points.
Energy was the top sector contributor with 21.56 net points.
Leading the index were NexGen Energy Ltd, up 8.3 percent, Eldorado Gold Corp, up 7.5 percent, and Russel Metals Inc, higher by 5.8 percent.
Lagging shares were Maple Leaf Foods Inc, down 5.7 percent, Cineplex Inc, down 4.6 percent, and Home Capital Group Inc, lower by 4.2 percent.
On the TSX 143 issues advanced and 105 declined as a 1.4-to-1 ratio favored advancers. There were 11 new highs and 3 new lows, with total volume of 207.5 million shares.
The most heavily traded shares by volume were Bombardier Inc, Aurora Cannabis Inc and Cenovus Energy Inc.
The TSX’s energy group rose 2.15 points, or 1.08 percent, while the financials sector slipped 0.65 points, or -0.22 percent.
West Texas Intermediate crude futures rose 0.61 percent, or $0.41, to $67.67 a barrel.
The TSX is off 3.6 percent for the year.
Reuters