NEW YORK, May 20 (Xinhua) -- U.S. stocks closed lower on Tuesday, as investor confidence wavered amid fresh warnings that optimism surrounding easing trade tensions and slowing inflation may be premature.
The Dow Jones Industrial Average declined 114.83 points, or 0.27 percent, to end at 42,677.24. The S&P 500 lost 23.14 points, or 0.39 percent, closing at 5,940.46, snapping a six-day winning streak. The Nasdaq Composite slipped 72.75 points, or 0.38 percent, to 19,142.71.
Eight of the eleven S&P 500 sectors ended in red, with energy and communication services leading losses, down 0.99 percent and 0.77 percent, respectively. Utilities and health care were the day's top performers, edging up 0.29 percent and 0.27 percent, respectively.
Concerns resurfaced after St. Louis Fed President Alberto Musalem cautioned that tariffs could still have a "significant" economic impact, despite the recent trade truce between the United States and China. "The range of possible economic outcomes for the next few quarters is wide," Musalem said. "Economic policy uncertainty is unusually high."
The White House has continued to pressure the Federal Reserve to treat recent price increases as temporary and to begin lowering interest rates, with U.S. President Donald Trump urging the central bank to ease policy. However, many Fed officials remain divided, expressing uncertainty about the direction of the economy and the appropriate next steps for monetary policy.
Meanwhile, Trump's sweeping tax bill continued to face political resistance in the House. On Tuesday, the U.S. president visited Capitol Hill in an attempt to rally support from both fiscal conservatives and a group of blue-state Republicans seeking changes to the state and local tax deduction cap.
On the corporate front, Home Depot was down 0.61 percent after it reported mixed earnings results, reflecting caution among consumers amid ongoing tariff uncertainty. The home improvement retailer posted a 9.4 percent year-over-year revenue increase to 39.86 billion U.S. dollars in the fiscal quarter ending May 4, slightly above expectations. However, earnings per share fell 3 percent to 3.56, missing the consensus forecast of 3.59 U.S. dollars.
"We project it to take multiple quarters and into next year before the growth becomes more solid and flows through to earnings, as near-term macro pressures continue, particularly with uncertainty amidst new tariff policies," Telsey Advisory Group's Joe Feldman wrote in a note prior to earnings.
Mega-cap tech stocks, which have led much of the recent market rebound, saw broad weakness. Nvidia, Apple, Amazon, and Alphabet all declined, while Microsoft and Meta also lost ground. Tesla rose 0.51 percent, extending a multi-week rally, and Broadcom added 0.46 percent.
