Shares of industrial and transportation companies fell as comments from President Donald Trump suggested a trade war with China could drag out past the 2020 election.
Mr. Trump said he had "no deadline" to conclude a trade deal with China, and raised the prospect of waiting until after the 2020 presidential election. Since a Washington DC meeting between the trade delegations in October, investors have awaited confirmation of a "phase one" deal.
There are also doubts over whether another round of tariffs will take effect on billions of dollars of Chinese imports on Dec. 15. Most Wall Street strategists anticipate some kind of a formal truce in the trade war in the coming weeks.
"An interim, skinny U.S.-China trade deal should temporarily relieve trade concerns ahead of the U.S. presidential election and pave the way for a midyear, mini-boost in global growth led by U.S. rates and a weaker dollar," said strategists at brokerage Bank of America Merrill Lynch Global Research, in a recent 2020 outlook.
Mr. Trump also stoked a tariff spat with France, threatening to impose tariffs on some of the nation's luxury exports, during a visit to Europe for a North Atlantic Treaty Organization meeting in London.
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