By Jessica Menton
The Dow Jones Industrial Average slumped for a fourth consecutive week Friday, with some analysts saying stocks could face continued pressure as the trade dispute between Washington and Beijing drags on.
All three indexes notched weekly declines, with the blue-chip index posting its longest losing streak since May 2016, while the S&P 500 and Nasdaq recorded two straight weeks of losses.
Major averages have retreated from records amid heightened tensions between the world's two biggest economies. Stocks bounced back midweek after the Dow and S&P 500 on Monday posted their biggest one-day losses since Jan. 3. But the rebound didn't hold Friday.
The Dow industrials fell 98.68 points, or 0.4%, to 25764.00. The S&P 500 slipped 16.79 points, or 0.6%, to 2859.53. Ten of the 11 sectors in the broad index declined, led by losses in trade-sensitive industrial shares. The technology-heavy Nasdaq Composite lost 81.76 points, or 1%, to 7816.28.
Trade talks between the U.S. and China have stalled this month, with Washington on May 10 raising tariffs on $200 billion of Chinese goods to 25% from 10%. The new escalation in trade tensions has upended investors' hopes that the dispute would be swiftly resolved.
"It's been really challenging as an investor to try and figure out which direction things are headed with the U.S.-China trade conflict," said Timothy Chubb, chief investment officer at Girard. "There's a lot of confusion. A lot of investors at this point are sitting on their hands looking to take some profits or rebalance their portfolios but aren't making a [convincing] move in one direction or another."
Still, all three major averages are each within 4.3% of the closing records. Investors are looking ahead to next month, when President Trump and Chinese President Xi Jinping attend a Group of 20 meeting in Japan that could give them a chance to arrange another summit.
The spat also has raised investor anxiety over global growth fears. Investors pulled $19.5 billion out of global mutual and exchange-traded funds in the week ended May 15, while bonds added $5.1 billion for their 19th week of inflows, according to a Bank of America Merrill Lynch analysis of data from fund tracker EPFR Global.
Stocks had pared losses in early trading Friday, after the Trump administration said it would put off for 180 days a final decision on whether to impose broad tariffs on cars produced by major trading partners including the European Union and Japan, citing national-security concerns.
"The fact that we got this flexibility on auto tariffs is crucial because the market is trying to determine if both sides are taking a hard-line approach," said Jeff Sica, chief executive at Circle Squared Alternative Investments. "Some investors are viewing these concessions as a breaking of the stalemate."
Meanwhile, the Trump administration reached a deal with Canada and Mexico that would end U.S.-imposed tariffs on steel and aluminum imports, removing a major barrier to the three countries' new trade pact.
A jump in U.S. consumer sentiment also helped boost investor confidence about the health of the U.S. economy. Household sentiment in May rose to the highest level since 2004, driven by a brighter outlook for the economy, the University of Michigan said.
In Friday's action, shares of Deere fell $11.17, or 7.7%, to $134.82, after the company lowered its guidance for profit and equipment sales for the current fiscal year as its customers continue to face headwinds in the agricultural sector.
The yield on the benchmark 10-year Treasury note fell to 2.396% from 2.407%.
The WSJ Dollar Index, which tracks the dollar against a basket of currencies, rose 0.3%.
The British pound fell against the dollar for a sixth-straight session amid growing Brexit uncertainty. The currency declined 0.7% to $1.2711. Trade tensions also prompted a slide in the Chinese yuan, which fell 0.5% against the dollar.
In commodities markets, Brent crude oil fell 0.6% to settle at $72.21 a barrel, while gold lost 0.8% at $1274.50 an ounce.
Elsewhere, the Stoxx Europe 600 fell 0.4%. Chinese indexes led Asian markets lower, with the Shanghai Composite falling 2.5% and Hong Kong's Hang Seng falling 1.1%. Japan's Nikkei bucked the trend with a rise of 0.9%.
--Will Horner contributed to this article.
Write to Jessica Menton at Jessica.Menton@wsj.com