NEW YORK (Reuters) - Wall Street slipped on Tuesday, weighed down by financial stocks as a deepening of the Treasury yield curve inversion raised U.S. recession worries and uncertainty over any progress in trade negotiations between the United States and China took a toll.
U.S. stocks initially advanced, building on Monday’s bounce, as President Donald Trump forecast another round of talks with Beijing. China’s foreign ministry, however, reiterated on Tuesday that it had not received any recent U.S. telephone call on trade.
A deepening of the inversion in the yield curve between the 2-year and 10-year U.S. Treasuries US2US10=RR underscored worries about a weakening global economy.
“It is going to be pretty confusing and unfortunately, without some kind of a major backpedaling on trade, to maybe slow things down and push things out, the economy is going to suffer,” said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.
The Dow Jones Industrial Average .DJI fell 124.66 points, or 0.48%, to 25,774.17, the S&P 500 .SPX lost 9.53 points, or 0.33%, to 2,868.85, and the Nasdaq Composite .IXIC dropped 26.79 points, or 0.34%, to 7,826.95.
Financial shares .SPSY, which tend to weaken in lower-rate and soft economic environments, lost 0.72%, while the defensive utilities .SPLRCU sector led advancing groups, edging up 0.14%.
The S&P 500 has lost nearly 4% in August on worries over the impact of the intensifying U.S.-China trade war on the slowing global economy and corporate profits, along with uncertainty around the pace of U.S. interest rate cuts from the Federal Reserve.
With the next Federal Reserve meeting scheduled for mid-September, investors are gauging the strength of the U.S. economy for clues on where rates are headed. The release next week of
