By Amrith Ramkumar and Christopher Whittall
The S&P 500 edged higher for the third straight session Wednesday, with gains in consumer-staples and trade-sensitive sectors offsetting declines in financial and technology firms.
Worries about tariffs slowing global growth and hurting multinational companies have kept major indexes wobbling near record levels lately. After the U.S. and Mexico reached a deal on trade recently, some investors are waiting to see if agreements with Canada, the European Union and China could boost global growth later in the year.
The S&P 500 and Dow Jones Industrial Average eked out gains following a Wall Street Journal report that the U.S. is reaching out to China for a new round of trade talks. Some analysts have said the market is waiting for a resolution to the dispute, following months of continuing threats and discussions.
"There's quite a lot more macro uncertainty, and a lot that has to do with the trade-war fears," said Isabelle Mateos y Lago, chief multiasset strategist at BlackRock. "It's not an environment in which many people are enthusiastic about taking risk."
Still, Ms. Mateos y Lago said she favors U.S. stocks in the current environment, adding that U.S. companies have "more dynamic earnings [and] more dynamic sales growth."
The S&P 500 added less than 0.1%. The Dow industrials closed up 28 points, or 0.1%, at 25999, after earlier climbing as much as 175 points. The tech-heavy Nasdaq Composite fell 0.2%.
Trade-sensitive manufacturing and materials stocks rallied on the latest signs that the U.S. is willing to compromise on trade. Freeport-McMoRan, Stanley Black & Decker and Boeing were among the S&P 500's leaders.
Meanwhile, rising oil prices continued to lift energy stocks around the world, as traders weighed possible supply disruptions and a larger-than-expected drop in U.S. stockpiles.
Consumer-staples stocks rose after data Wednesday showed a gauge of U.S. business prices in August logged the first monthly decline in about a year and a half, though annual gains remain steady. Worries about higher costs have hurt the sector throughout the year.
The sector's 1.3% climb helped lift the broader S&P 500 despite a drop in financial stocks, which were hurt by falling Treasury yields that can portend lower lending profitability.
Declines in semiconductor stocks also led the broader technology sector lower, with the PHLX Semiconductor Index dropping for the fifth time in the past six sessions after Goldman Sachs downgraded the semiconductor capital equipment space to "neutral" from "attractive." The bank also lowered its rating on Micron Technology to "neutral" from "buy."
Micron Technology shares fell 4.3%, making it one of the worst performers in the S&P 500, while Lam Research and KLA-Tencor also were among the broad index's laggards.
Internet firms, another market leader in recent years, also tumbled anew on fresh regulatory fears. The latest declines came after the Journal reported that the Senate Commerce Committee will hold a high-profile hearing on the privacy practices of big tech companies later this month. Twitter fell 3.7%, while Facebook dropped 2.4%.
Snap shares fell 7% to a record low after BTIG analysts downgraded shares of the Snapchat parent to "sell."
Apple dropped 1.2% after it rolled out new gadgets during its annual product showcase. The technology giant is among the large companies that recently warned that further U.S. tariffs on Chinese goods could hurt its business.
Investors were parsing the latest inflation data showing a monthly dip in business prices. Despite the unexpected drop in the producer-price index, many analysts expect the Federal Reserve to stay on a gradual path of interest-rate increases and boost rates at its meeting later this month.
"It's certainly a big miss, and the real question is, 'What does CPI do tomorrow?'" said John Sheehan, a portfolio manager at Osterweis Capital Management. "If this is a consistent theme where PPI and CPI both miss, then we would start to change our opinion a little bit" about inflation and rates steadily climbing, he said.
The yield on the benchmark 10-year U.S. Treasury note fell to 2.963% from 2.979% Tuesday. Yields fall as bond prices rise. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, fell 0.3%
Elsewhere, gains in commodities-linked companies helped the Stoxx Europe 600 climb 0.5%.
Stocks in Asia continued to slide on trade fears. Hong Kong's Hang Seng, which recently entered bear-market territory, fell 0.3%. Japan's Nikkei Stock Average also shed 0.3%.
Write to Amrith Ramkumar at firstname.lastname@example.org and Christopher Whittall at email@example.com