Stocks slipped on Tuesday as the Trump administration reiterated its hard-line stance on trade, washing out solid gains in tech shares.
The Dow Jones Industrial Average fell 69.84 points to 26,492.21 after rising as much as 72.80 points. The closed 0.1 percent lower at 2,915.56 as losses in utilities off set a rise in energy. The Nasdaq Composite, however, advanced 0.2 percent to 8,007.47 as Amazon and Apple shares rose. Google-parent Alphabet also climbed on Tuesday
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President Donald Trump said at the United Nations General Assemble the U.S. "will no longer tolerate abuse" on trade. "We will not allow our workers to be victimized, our companies to be cheated and our wealth to be plundered and transferred," Trump added.
Trump's comments came after U.S. Trade Representative Robert Lighthizer said the United States was prepared to move ahead on a trade deal with Mexico that excluded Canada. Lighthizer said negotiations with Canada are at an impasse.Shares of Ford and General Motors fell 2.1 percent and 3.5 percent, respectively, following Lighthizer's comments.
The major indexes fell from their session highs after Trump's speech.
"It was clearly an America First speech and one that will resonate in the midterms," said said Quincy Krosby, chief market strategist at Prudential Financial. "It does not mean there won't be negotiations, but he's underscoring that the U.S. is demanding a level playing field."
"This is going to be a long process," said Krosby. "Until it is resolved, the market will continue to be drawn by headlines."
Trade fears have kept investors on edge for most of this year as they assess the potential ramifications of more protectionist policies around the world.
Stocks initially rose on Tuesday as higher rates lifted bank shares.
The 10-year Treasury note yield climbed to 3.11 percent, near its highest level of the year. The gains in yields come as the Federal Open Market Committee begins its two-day monetary policy meeting, with analysts expecting the central bank to raise rates by a quarter point.
The event will be watched closely to see if the central bank provides any signals as to where monetary policy will be heading over the coming months and into next year. Most respondents to the latest CNBC Fed Survey expect the central bank to raise rates two more times before year-end.
"The drive toward normalization, which includes the FOMC beginning to reduce its balance sheet by a maximum of $150B per quarter on Monday, still sources the stiffest secular headwind for the market," Jeremy Klein, chief market strategist at FBN Securities, said in a note. "If tariffs do much more harm than I surmise, than Jerome Powell and his colleagues could drag their feet when removing accommodative measures."
Energy stocks rose broadly as Brent crude hit a fresh four-year high. The Energy Select Sector SPDR fund (XLE) climbed 0.6 percent, led by Concho Resources and Baker Hughes. Both shares rose more than 2 percent.
Facebook's stock dropped 0.3 percent after Instagram's co-founders left the company. Analysts at J.P. Morgan said their departure could lead to a significant pullback in the short term.
Apple shares initially fell after Qualcomm accused the tech giant of stealing secrets and giving them to Intel. The stock recovered, however, to close 0.6 percent higher.Â
