Wall Street dips from record highs

US stocks have dipped on Tuesday, reversing earlier intraday record highs, following a report that the United States would likely maintain tariffs on Chinese goods until after November’s presidential election.

The eventual removal of tariffs by Washington would depend on Beijing’s compliance with the Phase 1 trade accord, which is expected to be signed on Wednesday, Bloomberg reported, citing sources.

With the S&P 500 at record levels, equivalent to around 18 times expected earnings, algorithmic traders and human investors interpreted the Bloomberg report as a reason to sell, said Joe Saluzzi, co-manager of Themis Trading, in Chatham, New Jersey.

“We’re in a Jason Bourne market. The first thing Jason Bourne does when he walks into a room is look for the exit, just in case,” Saluzzi said, comparing investor sentiment to the fictional action character.

The Dow Jones Industrial Average, S&P 500 and Nasdaq each touched intraday record highs before losing ground in afternoon trade. The Dow ended the session with a modest gain.

Wall Street has surged in recent weeks, fuelled by optimism that a truce in US President Trump’s trade war with China would boost corporate earnings.

China has pledged to buy nearly an additional $US80 billion ($A116 billion) of manufactured goods from the United States over the next two years, and over $US50 billion ($A73 billion) more in energy supplies, Reuters reported, citing a source briefed on the Phase 1 trade deal.

Kicking off the fourth-quarter earnings season, JPMorgan Chase & Co rose 1.2 per cent after reporting a better-than-expected profit on strength in its trading and underwriting businesses.

Wells Fargo & Co tumbled 5.4 per cent after reporting a slump in profit as it set aside $US1.5 billion ($A2.2 billion) for legal expenses. Citigroup Inc rose 1.6 per cent as it topped Wall Street

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