Wall Street lost ground on Tuesday after a warning from President Donald Trump to China amid ongoing trade negotiations pressured technology shares, while investors looked to an expected Federal Reserve interest rate cut at the conclusion of its monetary policy meeting.
The three major US stock indexes concluded the session in the red, pressured by technology and consumer discretionary stocks.
As trade talks between the world's two biggest economies continued in Shanghai on Tuesday, Trump warned China against trying to wait out his first term in office to finalise a deal.
"Techs are weaker today, as Trump took another shot across the bow to China over trade," said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. "Big multinational tech companies are very sensitive to trade and tariff issues with China."
Market participants are looking to the Fed's statement at the conclusion of its two-day meeting on Wednesday for clues as to how the central bank will proceed through year-end.
Many analysts said a 25-basis-point cut in interest rates is fully priced into the market.
"The message this sends to the market is that the Fed is supportive of economic expansion," said Sroka. "That they're cognizant of trade and tariff issues causing some slowdown, and a small cut tomorrow reinforces that rates are more likely to go down than up in the intermediate-term, which markets see as a positive signal."
Commerce Department data showed US consumer spending and prices rose moderately in June, pointing to slower economic growth and bolstering the case for monetary easing.
The Dow Jones Industrial Average fell 23.33 points, or 0.09 percent, to 27,198.02, the S&P 500 lost 7.79 points, or 0.26 percent, to 3,013.18he Nasdaq Composite dropped 19.72 points, or 0.24 percent, to 8,273.61.
More than half of the S&P 500 companies have released second-quarter earnings, of which 75.9 percent have beat bottom-line analyst expectations, according to Refinitiv data.
Apple shares gained more than 3 percent in post-market trading after the iPhone maker posted quarterly results that beat analyst expectations and Chief Executive Officer Tim Cook said the company saw "marked improvement in China."
Procter & Gamble Co jumped 3.8 percent after the consumer products maker beat quarterly revenue estimates, limiting losses on the blue-chip Dow index.
Shares of Capital One Financial Corp fell 5.9 percent after the credit-card issuer said information on 106 million people had been compromised.
Pfizer Inc's stock dropped 6.4 percent, weighing the most on the healthcare index, after brokers downgraded the stock following the drugmaker's announcement on Monday that it would spin off its Upjohn unit and merge it with Mylan.
Merck & Co Inc edged higher after reporting better-than-expected second-quarter results and raising its full-year earnings forecast.
Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.64-to-1 ratio favoured advancers.
The S&P 500 posted 30 new 52-week highs and 1 new low; the Nasdaq Composite recorded 76 new highs and 89 new lows.Volume on US exchanges was 6.47 billion shares, compared with the 6.07 billion average over the last 20 trading days.