US close: Stocks reverse early gains as trade war weighs on sentiment
Stocks closed lower on Tuesday as Washington's trade war with Beijing weighed on sentiment.
At the close, the Dow Jones Industrial Average was down 0.47% at 25,777.90, while the S&P 500 was 0.32% weaker at 2,869.16 and the Nasdaq Composite closed out the session 0.34% softer at 7,826.85.
The Dow Jones closed 120.93 points lower on Tuesday, reversing a morning rally that began in the previous session after Trump said at the G7 summit in France that the US and China were ready to start talking very seriously following contacts by phone between the two global superpowers a day earlier.
Sentiment initially got a boost on Tuesday after China revealed measures aimed at increasing consumption, including removing restrictions on buying US-made cars.
On Monday, the US President also said he expected the US to reach a trade deal with China, citing economic pressure on Beijing and China's vice-premier, Liu He, called for a resolution of the ongoing dispute.
However, sentiment was dampened after China's Global Times editor-in-chief Hu Xijin tweeted that China was "putting so much emphasis on trade talks," stating that "it's more and more difficult for the US to press China to make concessions" as the nation's economy becomes more and more driven by its domestic growth.
China announced measures aimed at boosting consumption, including the potential removal of car-buying restrictions.
The spread between the 10-year Treasury yield and the 2-year rate fell to -5 basis points, its lowest level in 12 years.
On the data front, orders for civilian and military aircraft and parts lifted US durable goods orders last month.
According to the Department of Commerce, orders for goods made to last more than three years jumped at a month-on-month pace of 2.1% in July to reach $250.38bn.
Elsewhere, US house price growth slowed in June, according to the S&P/Case-Shiller National Home Price Index out on Tuesday.
The 20-city index rose 2.1% year-on-year, down from 2.4% growth in May and missing expectations for a 2.4% increase.
In parallel, the Conference Board reported that its US consumer confidence index fell to a reading of 135.1 in August from a reading of 135.8 a month earlier. While still a decline, the figure was much higher than expected on the Street.
Lastly, manufacturing activity across mid-Atlantic states was moderate in August, according to the Federal Reserve Bank of Richmond, with indexes for shipments and the volume of new orders rising.
The composite manufacturing index rose to 1 in August from -12 in July. Economists were expecting a reading of -5 for the month.
In corporate news, tobacco companies Altria and Philip Morris International confirmed on Tuesday that they were in talks about a potential all-stock merger of equals. Altria lost 3.99% on the back of the news, while Philip Morris slumped 7.76%.
Johnson & Johnson shares picked up 1.9% after it was forced to pay $572m in an opioid case in Oklahoma.