Stocks fell on Wall Street in early trading Wednesday, erasing the market’s modest gains from the day before.
Banks and industrial companies led the slide. Wells Fargo lost 1% and General Electric gave up 1.5%.
Energy stocks also fell along with a drop in crude oil prices. Traders bid up shares in household goods makers, utilities and real estate, sectors seen as less risky. Bond prices and gold rose.
The selling came ahead of Federal Reserve Chairman Jerome Powell’s midmorning appearance before Congress. Powell was due to testify about the outlook for the U.S. economy. In a transcript of his prepared remarks, Powell said he expects the economy to continue growing at a solid pace, though he noted it still faces risks from slower growth overseas and trade tensions.
Meanwhile, a published report in The Wall Street Journal Wednesday cast fresh doubts about a so-called phase-one trade deal between the U.S. and China. The report, which cited unnamed sources, highlighted that Washington and Beijing are at odds over whether the U.S. will roll back tariffs or merely hold off on going through with a new batch of taxes on Chinese goods due to go into effect on Dec. 15.
President Donald trump said Tuesday that an agreement on the phase one deal announced last month "could happen soon," but he warned that he was ready to raise tariffs "very substantially" if that fails.
Investors’ expectations about a stopgap trade deal between the world’s two largest economies has helped drive gains for the stock market the past five weeks. Federal Reserve interest rate cuts, data showing the economy is still growing solidly and better-than-expected corporate earnings reports have also helped lift the market.
KEEPING SCORE: The S&P 500 slipped 0.1% as of 10:31 a.m. Eastern Time. The index set a record high on Friday.
The Dow Jones Industrial Average fell 6 points, or less than 0.1%, to 27,685. The Nasdaq dropped 0.1%. It hit an all-time high on Tuesday. The Russell 2000 index of smaller companies slid 0.6%.
Stock indexes in Europe were broadly lower.
FED WATCH: Traders will be watching for clues about the central bank’s plans for interest rates.
Most investors expect the Fed to keep interest rates on hold for now after cutting them three times since the summer in a bid to shield the economy from slower global growth and the U.S.-China trade war.
The Fed signaled after its Oct. 29-30 meeting that it would probably hold off on any further cuts as long as the economy stays healthy and inflation moves closer to the central bank’s target of 2%.
FEELING SECURE: Home and business security company ADT rose 2.3% after its latest quarterly results topped Wall Street’s expectations. The company also announced a special dividend.
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