NEW YORK (AP) — Stocks are slipping in Wall Street’s first trading after a five-week rally carried it to its highest level since the spring of last year. The S&P 500 was 0.3% lower in early trading Tuesday. The Dow was off 156 points, or 0.4%, and the Nasdaq composite edged down 0.1%. The U.S. stock market is taking a breather after rising on hopes the economy can avoid a recession and inflation is easing enough for the Federal Reserve to stop raising interest rates soon. A frenzy around artificial intelligence has also vaulted a select group of tech stocks to huge gains.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street is stable Tuesday, the first trading day of the week, after a meeting between Chinese leader Xi Jinping and Secretary of State Antony Blinken yielded no signs of progress from either side on Taiwan, human rights, technology and other issues of contention.
Futures for the Dow Jones industrial and the S&P 500 fell about 0.3% before the bell Tuesday.
U.S. markets were closed for a holiday Monday.
The Chinese government said the meeting between Xi and the top U.S. diplomat produced “candid and in-depth” talks. Bilateral relations are at their lowest point in decades. Both sides indicated a willingness to cooperate.
“There is no doubt China and the U.S.A. need each other, and their relationship to be back on a more secure footing for mutually beneficial commercial reasons, as well as reducing the risk of actual conflict,” Clifford Bennett, chief economist at ACY Securities said in a commentary.
The Chinese economy is recovering at a slower pace than expected from the disruptions caused by efforts to vanquish COVID-19, leading the central bank to cut its benchmark 1-year loan prime rate on Tuesday by a tenth of a percentage point to 3.55%.
The 5-year rate was lowered to 4.2% in a move to help ease credit and encourage spending and investment to boost economic activity.
“Recent easing moves suggest that reopening efforts are losing their shine, setting the groundwork for more policy intervention to follow in the months ahead,” Yeap Jun Rong of IG said in a commentary.
In Asian trading, Japan’s benchmark Nikkei 225 inched up less than 0.1% to finish at 33,388.91. Australia’s S&P/ASX 200 added 0.9% to 7,357.80. South Korea’s Kospi lost 0.2% to 2,604.91. Hong Kong’s Hang Seng dipped 1.5% to 19,607.08, while the Shanghai Composite edged down 0.5% to 3,240.36.
Also in China, Alibaba Group announced a major management reshuffle as the e-commerce giant restructures into six different business divisions to spur growth and adapt to fast-changing technologies.
Eddie Wu, chairman of its e-commerce group, will succeed Daniel Zhang as CEO, the company said Tuesday. Zhang will be CEO and chairman of Alibaba’s cloud computing unit, which will be spun off and is expected to be listed for trading within a year.
Alibaba shares fell about 2.3% in premarket trading in the U.S.
In Europe, France’s CAC 40 inched down about 0.2% at midday, while Germany’s DAX slipped 0.5%. Britain’s FTSE 100 added less than 0.1%.
In energy markets, benchmark U.S. crude inched down 4 cents to $71.74 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gained 75 cents to $76.84 a barrel.
In currency trading, the U.S. dollar edged down to 141.42 Japanese yen from 141.91 yen. The euro cost $1.0928, up slightly from $1.0921.
U.S. markets, which were closed Monday for the Juneteenth national holiday, are also watching the direction of interest rate hikes.
Last week, the Federal Reserve held its benchmark lending rate steady, the first time in 10 straight meetings it hasn’t announced an increase. The Fed warned it could raise rates as often as two more times this year.
Fed Chair Jerome Powell gives his semi-annual testimony before Congress on Wednesday and Thursday.
Markets quietly lost ground on Friday, but Wall Street still closed out its best week since March. The benchmark S&P 500 logged its fifth straight winning week, its longest such streak since November 2021.
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Kageyama reported from Tokyo; Ott reported from Silver Spring, Md.