Investing.com - Stocks closed lower Tuesday as cautious sentiment kept a lid on gains amid fears trade tensions could intensify this week.
The Dow Jones Industrial Average fell about 0.05%. The S&P 500 fell 0.16%, while the Nasdaq Composite fell about 0.23%.
Fresh from a long weekend, courtesy of Labor Day, investors returned to the market and put the brakes on further upside momentum in U.S. stocks amid fears trade tensions could ratchet up a few notches. The United States and Canada resume trade talks on Wednesday.
U.S.-Canada talks to revamp the North American Free Trade Agreement (NAFTA) failed to come to an agreement last week. But that has not softened President Donald Trump's outlook on negotiations as he insisted in a tweet that there was "no political necessity to keep Canada in the new NAFTA deal."
U.S.-Sino trade relations could be set for further turmoil later this week as traders fear the Trump administration may impose another round of tariffs on China, risking retaliation from Beijing.
The Trump administration could impose a 25% tariff on $200 billion worth of Chinese imported goods as soon as Thursday. Reports surfaced last week, claiming Trump was considering moving ahead with the tariffs on China after the comment period expires on Thursday.
Trade-sensitive names like Caterpillar (NYSE:CAT) and 3M (NYSE:MMM), which have significant international exposure, ended the day lower.
In an otherwise subdued day on Wall Street, there were some bright spots offering investors solace somewhat as gains in financials limited losses in the broader market amid signs the U.S. economy remains on solid footing.
ISM manufacturing data for August rose to a reading of 61.3, beating expectations of 57.6. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy. That was biggest jump in U.S. manufacturing business conditions since 2004, according to a survey of industry executives.
Energy stocks, meanwhile, pressured the broader market as oil prices settled just above the flatline after erasing intraday gains, despite expectations that tropical storm Gordon could disrupt domestic supplies.
On the New York Mercantile Exchange crude futures for October delivery rose 7 cents to settle at $69.87 a barrel.
On the corporate news front, Amazon (NASDAQ:AMZN) briefly joined the $1 trillion market-valuation club after its shares notched an intraday high of $2,050.50 before easing slightly. Amazon is up more than 70% for the year as it continues to revitalize its business, encroaching into new areas like health care.
Top S&P 500 Gainers and Losers Today:
Advanced Micro Devices (NASDAQ:AMD), Ulta Beauty (NASDAQ:ULTA) and Kohl’s (NYSE:KSS) were among the top S&P 500 gainers for the session.
Seagate Technology (NASDAQ:STX), Western Digital (NASDAQ:WDC) and PVH (NYSE:PVH) were among the worst S&P 500 performers of the session.