Stocks dropped on Tuesday after President Donald Trump said he was not satisfied with U.S.-China trade talks. He also said a highly anticipated summit with North Korea may not happen after all.
The Dow Jones industrial average fell 178.88 points to close at 24,834.41 as Boeing shares declined 2.5 percent. The S&P 500 declined 0.3 percent to 2,724.44 with energy lagging. The Nasdaq compositelost 0.2 percent to close at 7,378.46.
Trump told reporters he was “not satisfied” with the trade talks that took place with China last week. He called the negotiations a “start” as his administration keeps working toward a final deal to address trade imbalances with Beijing.
The president also discussed a summit with North Korean leader Kim Jong Un, stating: “Whether or not it happens, you’ll be knowing pretty soon.” The summit is scheduled for June 12 in Singapore.
“There’s a lot of uncertainty right now and that’s reflected in the tight trading band we’ve been in for the past few months,” said Jennifer Ellison, principal at Bingham, Osborn & Scarborough.
Stocks started the session trading higher after China said it will reduce levies on automakers and car parts. China’s Finance Ministry said tariffs on certain vehicles will come down to 15 percent from as much as 25 percent while levies on some parts will be brought down to 6 percent effective July 1.
Shares of Ford and General Motors rose on the news, gaining 0.1 percent and 0.5 percent, respectively. Tesla initially rose more than 1 percent before sliding 3.3 percent.
The announcement by China comes after Treasury Secretary Steven Mnuchin told CNBC on Monday the U.S. has made “very meaningful progress” with China on trade matters, noting: “Now it’s up to both of us to make sure that we can implement it.”
Mnuchin’s comments helped push the Dow up nearly 300 points as Wall Street interpreted the remarks as tensions between the U.S. and China easing. The Dow also closed above 25,000 for the first time since March on Monday.
Rising trade tensions between the U.S. and China, coupled with rising rates and inflationary fears, pushed stocks off of record highs earlier this year. Since then, the major indexes have recovered slightly from those losses.
However, Steve Chiavarone of Federated Investors said he is not too worried about the tensions between the two giant economies, noting the amount of money in tariffs proposed is far smaller than the benefit of lower taxes. “It’s like 20 to 1,” the firm’s assistant vice president said.