NEW YORK (AFP) - Wall Street sank on Tuesday (May 22) following comments from President Donald Trump, who raised the possibility a planned June summit with North Korea's leader might not happen.
Trump also said he was not happy with trade talks with China, dampening enthusiasm among investors despite the truce declared over the weekend by Chinese and US officials in Washington, which deflated the escalating conflict.
Industrial stocks, which had lifted the Dow Jones Industrial Average on Monday after benefitting from the apparently improving trade ties, dragged the benchmark index lower.
The Dow fell 0.7 per cent, or nearly 180 points, to close at 24,834.41. The broader S&P 500 sank 0.3 per cent, settling at 2,724.45 and the tech-heavy Nasdaq lost 0.2 per cent to finish at 7,378.46.
In a meeting with South Korean President Moon Jae-in, Trump told reporters the June 12 summit with North Korean leader Kim Jong Un could be delayed.
"There are certain conditions we want to happen. I think we'll get those conditions. And if we don't, we won't have the meeting," he said.
Trump also said he was "not satisfied" with the trade talks, and called China is the worst offender "the big one - to take advantage of us on trade."
China "has made a fortune. I mean, a transfer of wealth like nobody has ever seen in history."
Markets have whipsawed up and down in recent days as officials have veered from hardline to hopeful and back again.
Meanwhile, Phil Davis of PSW Investments told AFP that, while markets may have felt relief on Monday because the tone had shifted away from confrontation between Washington and Beijing, the ballyhooed trade talks had in fact produced little of substance.
"The only concrete concession China made for the moment is lowering tariffs on cars. But President Xi announced it in April," said Davis, referring to an April 10 speech by Chinese leader Xi Jinping in which he pledged to make the country more accessible to foreign businesses.
"China has nearly done nothing but president Trump is claiming victory."
Shares in Boeing, which counts China as a prime export market, fell 2.5 per cent. Industrial equipment maker Caterpillar lost 1.7 per cent.
After opening significantly higher on the hopes of increased access to the Chinese market, auto stocks mostly erased their gains. Ford Motor Co closed up less than a tenth of a percentage point.
Retailer Kohl's tumbled 7.4 per cent after warning it might see slower growth in the second half of the year.