NEW YORK (Reuters) – U.S. stocks fell on Wednesday, breaking a four-session streak of gains after Washington’s threat to impose tariffs on an additional $200 billion worth of Chinese goods fanned trade war fears, while a sharp drop in oil prices hit energy shares.
China responded to U.S. President Donald Trump’s threats by accusing the United States of bullying and warned that it would hit back.
Industrial names including Boeing, 3M and Caterpillar, which have been among the hardest hit by the recent trade dispute, were among the Dow’s biggest drags.
Materials, down 1.7 percent, was another big negative influence on the market, with Freeport-McMoRan down 3.9 percent as copper prices hit their lowest in about a year.
Investors said trade war worries may slip to the background as investors begin to focus more closely on second-quarter earnings over the coming weeks. Results from JPMorgan Chase and other big banks are due Friday.
“The trade situation is worrisome but nothing more is going to happen right away. This story may recede in people’s consciousness while current stories capture people’s interests, particularly earnings,” said John Carey, portfolio manager at Amundi Pioneer Asset Management in Boston.
“People are looking for some fairly strong earnings, and there’s certainly potential for disappointment.”
To view a graphic on U.S.-China tariff war and the S&P 500, click: reut.rs/2NKw0pN
Analysts are forecasting S&P 500 companies’ earnings grew about 21 percent in the second quarter from a year earlier, according to Thomson Reuters data.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 11, 2018. REUTERS/Brendan McDermid
Also pressuring the market Wednesday, the S&P 500 energy index fell 2.2 percent, leading sector declines. U.S. crude oil futures settled down 5 percent on the trade dispute escalation and as