Wall Street drops on report trade deal may not be completed this year

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© Reuters. Traders work on the floor at the NYSE in New York© Reuters. Traders work on the floor at the NYSE in New York

By Arjun Panchadar

(Reuters) – Wall Street’s main indexes fell about 1% on Wednesday after a report said a “phase one” trade deal between Washington and Beijing may not be completed this year.

Completion of an initial trade deal could slide into next year, Reuters reported, citing trade experts and people close to the White House, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own.

“The markets were certainly pricing in a completion of the deal by the end of this year,” said Art Hogan, chief market strategist at National Securities in New York.

“The market is now trying to ascertain how long will it take for both sides to agree to a truce.”

The world’s top two economies came tantalizingly close to a deal in May after a year of tariffs on each other’s goods, before talks fell apart.

Earlier a U.S. Senate measure aimed at protecting human rights in Hong Kong amid prolonged protests had escalated tensions with China and pressured the market.

Expectations of a trade deal, coupled with a fairly strong third-quarter earnings season, have helped Wall Street’s main indexes scale record highs this month.

Reports from Target Corp (N:) and Lowe’s Cos Inc (N:) were bright spots on Wednesday, with their shares jumping 12.3% and 3.4%, respectively, after the two companies raised their profit forecasts.

The declines were broad-based, with nine of the 11 major S&P 500 sectors lower. The trade-sensitive technology sector’s () dropped 1.3%, the biggest drag on the benchmark index. The Philadelphia Semiconductor index () slid 1.75%.

The interest-rate sensitive financial index () fell 1% as safety buying pressured the benchmark further.

Focus now turns to the release of minutes from the Federal Reserve’s October policy meeting later in the day. The central bank cut interest rates for the third time this year at the meeting, but signaled it may be done with the easing for now.

At 01:21 p.m. ET the Dow Jones Industrial Average () was down 251.18 points, or 0.90%, at 27,682.84, the S&P 500 () was down 27.47 points, or 0.88%, at 3,092.71 and the Nasdaq Composite () was down 97.01 points, or 1.13%, at 8,473.65.

Among other stocks, apparel retailer Urban Outfitters Inc (O:) slumped 16% after missing quarterly sales estimates on weaker demand for its namesake brand.

Declining issues outnumbered advancers for a 1.86-to-1 ratio on the NYSE and for a 1.89-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and three new lows, while the Nasdaq recorded 85 new highs and 77 new lows.

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