The S&P 500 closed lower as trade-war jitters and plunging energy stocks overshadowed a rally in tech.
The Dow Jones Industrial Average fell about 0.32%. The S&P 500 fell 0.10%, while the Nasdaq Composite rose about 0.46%.
President Donald Trump’s officials are considering raising pending tariffs on $200 billion in Chinese goods to 25% from 10%, Bloomberg reported, citing people familiar with the deliberations.
That dented already fragile investor hopes of the United States and China returning to the negotiation table to reconcile their differing views on trade as was indicated by another Bloomberg report Tuesday.
China warned that U.S. against "blackmailing and pressuring" it over trade, raising the prospect of a full-blown trade war between the world's largest two economies, weighing on trade-sensitive stocks.
Shares of 3M (NYSE:MMM), Caterpillar (NYSE:CAT) and Boeing (NYSE:BA), - notable names most sensitive to escalating trade tensions - came under pressure, dragging industrials lower and offsetting an Apple-infused tech rally.
Apple (NASDAQ:AAPL) stock rose more than 5%, as it neared an unprecedented $1-trillion-dollar market-cap landmark after its second-quarter report beat estimates. Other tech heavyweights including Alphabet (NASDAQ:GOOGL), Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) ended the day higher.
Monetary policy returned to focus in the late afternoon session as the Federal Reserve kept rates unchanged and stuck largely to script, keeping market expectations for a September rate hike intact.
The Fed said it would continue to gradually raise rates should the economy continue to show "sustained expansion," supported by a strong labor market and close-to-target inflation.
Plunging energy stocks continued to weighed on the broader market after data showed an unexpected build in U.S. crude stockpiles as imports increased and exports fell.
On the New York Mercantile Exchange crude futures for September fell 1.6% to settle at $67.66 a barrel.
On the economic front, the private sector created more jobs than expected last month, according to a measure by ADP, raising expectations for an upbeat nonfarm payrolls report due Friday.
Private payrolls grew by 219,000 for July, rising from the 181,000 seen in June, ADP and Moody's Analytics said. That beat the economists’ forecast of 186,000.
On the corporate earnings front, Humana raised guidance after reporting above-consensus adjusted second-quarter earnings.
And Sprint's quarterly profit topped estimates as the company reported a net 87,000 new phone subscribers, well above the 40,000 analysts had expected.
Humana (NYSE:HUM) stock closed higher, while Sprint (NYSE:S) closed nearly 1% lower.
Top S&P 500 Gainers and Losers Today:
Apple (NASDAQ:AAPL), Molson Coors (NYSE:TAP) and Verisk Analytics (NASDAQ:VRSK) were among the top S&P 500 gainers for the session.
Hanesbrands (NYSE:HBI), MGM Resorts (NYSE:MGM), Express Scripts (NASDAQ:ESRX) were among the worst S&P 500 performers of the session.