Declines in internet stocks dragged down the S&P 500 as investors awaited updates on key trading relationships. The stumble for technology shares came as Twitter Chief Executive Jack Dorsey and Facebook Chief Operating Officer Sheryl Sandberg testified in front of Congress about their platforms’ handling of manipulation by foreign actors during the 2016 presidential election. Worries about heavier regulation have hung over the market’s best-performing sector, and some investors are also anxious that tariffs will hurt trade-dependent internet firms. Those broader concerns about trade and the outlook for emerging markets have hurt major indexes lately, with some analysts expecting the U.S. to escalate tariffs on China this week. Some investors fear a far-reaching global growth slowdown that could eventually spread to the U.S. economy, which has remained steady despite continuing trade threats. More tariffs on China could trigger further falls in growth-sensitive stock sectors, emerging markets and commodities, analysts have said. The S&P 500 dropped 8.12 points, or 0.3%, to 2888.60 for its third decline in the past four sessions, though it remains near an all-time high. The Dow Jones Industrial Average closed up 22.51 points, or 0.1%, at 25974.99 to snap a three session losing streak, while the tech-heavy Nasdaq Composite shed 96.07 points, or 1.2%, to 7995.17. Twitter fell $2.11, or 6.1%, to $32.73, while Facebook and Google parent Alphabet each shed more than 1%. Other internet firms such as Amazon.com and Netflix also retreated, with the streaming firm tumbling 22.42, or 6.2%, to 341.18. The U.S. and Canada have been working to resolve issues holding up a renegotiation of the North American Free Trade Agreement. President Trump reiterated over the Labor Day weekend that if the U.S. and Canada fail to reach a deal, his administration could move forward on a pact that excludes Canada.
In commodity news, gold prices edged higher, lifted by a weaker dollar. Gold for December delivery was up 0.2% at $1,201.30 a troy ounce on the Comex division of the New York Mercantile Exchange. Investors are looking ahead to Friday’s U.S. employment data, which many believe is an important gauge of the economy’s strength. Indications of uneven growth could bolster the case for the Federal Reserve to ease its pace of rate increases. Expectations of slower monetary tightening are often a boon for gold, which struggles to compete with yield-bearing investments when rates rise. In base metals, copper for December delivery rose 0.3% to $2.61 a pound.
IRON ORE: 67.02 + 0.54 (October contract)
Oil prices fell in a reversal of day-earlier increases as tropical storm Gordon’s path through the Gulf of Mexico turned out to be less problematic for the U.S. oil-and-refining industry than many investors had feared. Light, sweet crude for October delivery fell 1.6% to close at $68.72 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, declined 1.2% to $77.27 a barrel. Fears that tropical storm Gordon would morph into a hurricane and possibly pound U.S. Gulf Coast refining hubs as it made landfall had triggered a surge in oil prices Tuesday, with Brent nearing the $80-a-barrel threshold and U.S. oil prices briefly spiking above $71. But Gordon never became a hurricane and made landfall Tuesday night near the Alabama Mississippi border rather than earlier projections that it would hit the coast further west, near the Louisiana-Mississippi border. Those earlier projections could have put the storm on target to affect some refineries and oil-producing regions in Louisiana.
The U.S. dollar fell against the British pound and the euro after a media report said Germany and the U.K. had made progress in Brexit talks. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, fell 0.2% to 89.82. The pound led gains, rising 0.4% against the dollar. The dollar fell after Bloomberg reported that the U.K. and Germany have made progress on a Brexit deal. The pound jumped following the report and also changed course against the euro. Germany is prepared to “accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a Brexit deal done,” Bloomberg reported, citing unnamed sources. The pound had dropped earlier on Wednesday. Slow progress in the talks to codify the terms of separation between the U.K. and the European Union has weighed on investor sentiment for the pound and the euro, which is used by 19 European nations. Should the talks advance, they could further calm some investors’ anxieties.