U.S. stocks headed lower on Thursday as investors remained wary about the outcome of U.S.-China trade talks, while a slew of disappointing earnings weighed on the indexes.
Industrial stocks Caterpillar (CAT.N) and Boeing (BA.N) were among the biggest drags on the Dow Jones Industrial Average.DJI, which dipped below its 200-day moving average for the first time since April 2.
AIG (AIG.N) dropped 8.5 % after the insurer reported a lower-than-expected quarterly profit, while Cardinal Health (CAH.N) declined 15.6 % after the drug distributor cut its annual earnings forecast.
Tesla (TSLA.O) shares fell 5.7 %, extending losses from Wednesday after Chief Executive Officer Elon Musk cut off analysts asking about the company’s profit potential, and grappled with concerns about Tesla’s ability to raise money in the future, despite promises that production of the troubled Model 3 electric car was on track.
Wall Street closed lower on Thursday, weighed down by news about potential U.S. restrictions on Chinese telecommunications companies, and after the Federal Reserve reaffirmed outlook for more rate hikes. The central bank expressed confidence that a recent rise in inflation near to its target would be sustained, leaving it on track to raise borrowing costs in June, but emphasized the inflation target was “symmetric”, suggesting it was not inclined to speed up its tightening plans.
Meanwhile, Trump praised his relationship with Chinese President Xi Jinping as a U.S. delegation arrived in Beijing on Thursday for talks on tariffs, with state media saying China will stand up to U.S. bullying. The discussions, led by U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He, are expected to cover a wide range of U.S. complaints about China’s trade practices, from accusations of forced technology transfers to state subsidies for technology development. A breakthrough deal to fundamentally change China’s economic policies is viewed as highly unlikely during the two-day visit, though a package of short-term Chinese measures could delay a U.S. decision to impose tariffs on about USD 50 billion worth of Chinese exports.