Wall Street ended lower on Tuesday (Wednesday AEST), as uncertainty over United States-China trade negotiations and the looming Federal Reserve interest rate decision weighed on investor sentiment.
The Dow Jones Industrial Average declined by 204.57 points, or 0.46%, to finish at 44,633.0. The S&P 500 slipped 18.9 points, or 0.3%, to 6,370.9, while the Nasdaq Composite dropped 80.3 points, or 0.4%, to close at 21,098.3.
The decline came as optimism around international trade progress began to wane. While the U.S. has recently made strides in trade discussions with Japan and the European Union, negotiations with China appeared to stall.
U.S. officials wrapped up talks with their Chinese counterparts on Tuesday, with officials agreeing to pursue an extension of their 90-day tariff truce after two days of what both sides called constructive trade talks in Stockholm.
However, any final decision on tariffs remains contingent on President Donald Trump’s approval.
Investors also digested a raft of corporate earnings on Tuesday. Boeing fell 4.4% despite reporting strong quarterly results and its highest aircraft delivery tally since 2018.
Consumer goods giant Procter & Gamble dipped 0.3%, even after lifting its full-year revenue forecast and appointing an internal candidate as its next chief executive.
Meanwhile, United Parcel Service tumbled 10.6% after missing earnings expectations and failing to issue forward guidance.
The week is expected to be pivotal for U.S. earnings, with heavyweight technology firms including Meta Platforms, Microsoft, Apple, and Amazon set to report their results over the coming days.
Collectively known as the "Magnificent Seven", these companies are likely to play a major role in steering broader market sentiment.
Investors are also bracing for the Federal Reserve interest rate decision, due Wednesday (Thursday AEST). The central bank is widely anticipated to maintain its benchmark interest rate at 4.25% to 4.5%, but attention will focus on accompanying guidance amid persistent inflationary pressures and a resilient labour market.
Economic releases will remain in focus throughout the week, including gross domestic product (GDP), private payroll figures and nonfarm payrolls data.
On the bond markets, yields edged lower. The yield on the 10-year Treasury fell 2% to 4.324%, while the 2-year yield slipped 1.6% to 3.869%.
