Stocks tumble as investors remain unconvinced on trade progress

Reuters/Carlos Barria

Stocks fell on Tuesday as traders were unsure if the US and China were making meaningful progress on a trade deal, stoking fears of another stalemate.
Chinese officials reiterated that they were unaware of the phone calls President Trump claimed occurred over the weekend between high level negotiators.
Philip Morris International confirmed it was exploring an all-stock "merger of equals" with Altria Group, a dominant force in the US tobacco market.
Tuesday’s losses continued after a closely-watched segment of the yield curve inverted the most since the financial crisis.
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Stocks slid on Tuesday as investor’s remained skeptical that the US and China were making significant progress toward a trade deal.

President Trump said Chinese officials asked to restart trade negotiations during a series of phone calls with his administration over the weekend, leading to a rally in stocks on Monday.

On Tuesday, Chinese officials reiterated that they unaware of any phone conversations taking place with high-level members of the Trump administration, casting doubt on the progress of the trade talks.

"I’m not aware of the two phone calls over the weekend that the US side talked about," China’s Foreign Ministry Spokesperson Geng Shuang said during a press conference on Tuesday. "We hope the US will remain calm, return to reason, and immediately stop its wrong approach so as to create conditions for bilateral consultations."

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Traders are still on edge moving closer to September as the US is expected to impose new taxes on Chinese imports —while increasing existing tariffs — and China is preparing to levy new duties on $75 billion worth on US goods.

Losses intensified on Tuesday after thespread between two- and 10-year Treasury yields fell as low as negative 4.2 basis, its lowest level since before the financial crisis. The relationship is one of the most closely-followed segments of the so-called yield curve, and has inverted before each of the last seven recessions.

Here’s a look at the major indexes as of the 4 p.m. close on Tuesday:

The S&P 500 declined 0.32%, to 2,869.16.
The Dow Jones Industrial Average fell 0.47%, to 25,777.90.
The Nasdaq Composite slid 0.34%, to 7,826.95.

Johnson & Johnson was ordered to pay $572 million after an Oklahoma judge ruled against the drugmaker in a case accusing the company of contributing to the US opioid epidemic. Shares of J&J rose as much as 5% on the news, adding close to $15 billion in market value to the company’s stock as the penalty was far lower than expected.

Philip Morris International confirmed its currently in discussions with Altria Group about a possible all-stock "merger of equals." The deal would reunite the two tobacco giants after they split more than ten years ago, with the combined company being worth north of $200 billion.

Within the S&P 500, these were the largest gainers:

And the largest decliners:

J.M. Smucker: (-8.2%)
Philip Morris: (-7.8%)
Humana: (-5.8%)

Energy and financial stocks fell more than 0.6%, as consumer discretionary and industrials dropped more than 0.4%. Communications, utilities, and materials posted slight gains.

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