Producers of metals and other raw materials fell after the latest escalation in the U.S.-China trade dispute.
The selloff of economically cyclical stocks on the U.S. market was triggered by a tweet from President Donald Trump saying he "hereby ordered" U.S. companies to look at alternatives to doing business in China, according to one strategist. "The concern for the market was: are we entering a new, more dire, more uncertain phase in the trade negotiations?" said Quincy Krosby, chief market strategist at Prudential Financial.
Federal Reserve Chairman Jerome Powell signaled the central bank would follow its rate cut last month, its first in more than a decade, with an additional reduction soon. But he also cautioned the Fed's monetary-policy tools weren't well-suited to counter rising business and investor anxieties over the intensifying trade conflict between Mr. Trump and Chinese President Xi Jinping.
Agricultural commodities, a major U.S. export to China, were in the front lines of the selling. Hog futures fell 3.8% to 59.925 cents a pound.
The price of copper, sometimes seen as a gauge of Chinese economic activity, fell to a two-year low. Gold futures, viewed as both a safe haven and a play on falling interest rates, rose to the highest level since April 2013 in New York trading.
Rob Curran, firstname.lastname@example.org