Stocks closed down Tuesday, with the Dow Jones Industrial Average snapping a six-day winning streak, as investors weighed U.S.-China trade tensions against prospects for monetary stimulus from the U.S. central bank.
China is promising to “fight to the end” if the U.S. escalates tensions in their ongoing trade war as President Trump edges closer to deciding whether to impose tariffs on another $300 billion worth of Chinese goods.
Chinese Foreign Ministry spokesman Geng Shuang said China is willing to negotiate with the U.S. if both sides are willing to come to a fair agreement but said it was “not afraid of fighting a trade war."
The Federal Reserve is set to meet next week and Wall Street will be closely eyeing prospects that the central bank will cut interest rates.
Shares of United Technologies and Raytheon pulled down industrial names, after President Trump commented on the $121 billion merger between the companies and whether it should go forward.
|I:DJI||DOW JONES AVERAGES||33761.05||+424.38||+1.27%|
|I:COMP||NASDAQ COMPOSITE INDEX||13047.185943||+267.27||+2.09%|
Shares of Beyond Meat fell after J.P. Morgan, downgraded them, saying the exponential growth expected from the plant-based burger was now priced in.
The company forecast overall sales in 2019 to more than double, sending shares surging over 69 percent over two days. J.P. Morgan analyst Ken Goldman cut the stock rating to Neutral from Overweight and said it was "purely a valuation call."
Technology shares were higher, with Facebook, Apple, Amazon and Alphabet all gaining.
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Private equity firm Apollo Global Management said on Monday afternoon it had agreed to acquire U.S. digital imaging company Shutterfly for $2.7 billion, including the company's $900 million debt.
Apollo also announced it would acquire privately held Snapfish, a small internet-based retailer of photography products, to merge it with Shutterfly.
Both crude oil prices and the yield on the 10-Treasury closed relatively unchanged: $53.28 per barrel and 2.15 percent, respectively.
In economic news, producer prices excluding food, energy and trade services rose 0.4 percent last month, the government said. The so-called core PPI increased 2.3 percent in the 12 months through May after rising 2.2 percent in April.
Weaker energy and food prices, partially offset the increase in services last month. That led the producer price index for final demand to edge up 0.1 percent in May after gaining 0.2 percent in April.
In Asia, Chinese markets jumped as the government took measures to boost the economy, namely easing financial rules to help with local spending on public works.
The Shanghai Composite added 2.6 percent. Hong Kong's Hang Seng rose 0.8 percent. Japan's Nikkei ended the day rising 0.3 percent.
European markets ended the day with gains, Britain’s FTSE 100 was up 0.3 percent, France’s CAC 40 added 0.5 percent and Germany's DAX climbed 0.9 percent after being closed for a holiday on Monday.