Wall Street falls as Trump throws doubt on North Korea summit

Stocks on Wall Street fell, a day after waning concerns about trade tensions between the US and China helped send major global indexes to their highest close in months.

The two sides have agreed on the broad outlines of a reprieve for embattled Chinese telecom giant ZTE and Beijing easing tariffs on imported cars.

ZTE relies on US suppliers like Qualcomm for key components and the proposed deal would lift the Trump administration’s sales ban.

President Donald Trump has said he “envisions” the company being fined as much as $US1.3 billion.

“Anything tied to economic growth and the business cycle is going to be bid up in this environment where we get news that maybe the ‘trade war’ is less of a risk than it was before the comments,” says Jason Ware, chief investment officer at Albion Financial Group.

Recent news “suggests that things are on hold for now, as far as this escalating into something that would be truly bad for the global economy and therefore global markets,” he says.

Oil tests $US80
Meanwhile, Mr Trump has put a damper on another hot geopolitical issue, North Korea’s nuclear programme, while oil prices were steady as the administration threatened tighter sanctions against Iran over its role in Middle East conflicts.

Mr Trump says a planned June 12 summit in Singapore with North Korean dictator Kim Jong Un “may not work out,” adding if it doesn’t happen, then “maybe it would in the future.”

Mr Trump made the remarks as he greeted South Korean President Moon Jae-in at the White House. The president also said he had been disappointed by a second meeting between Mr Kim and Chinese President Xi Jinping, adding, “I can’t say I’m happy about it.”

Oil prices again rose through $US80 a barrel during intraday trading. Brent crude, the global benchmark, rose 0.2% to $US79.40 a barrel in London while US crude futures eased 0.2% to $US72.09 a barrel.

Last week Brent temporarily breached $US80 a barrel for the first time in more than three-and-a-half years. Analysts have estimated that anywhere from 400,000 to one million barrels a day of Iran’s 2.4 million barrels a day of crude exports could be at risk.

Dow drops
On Wall Street, the Dow Jones Industrial Average fell 178.88 points, or 0.7%, to 24,834.41, after rising above 25,000 on Monday for the first time since March.

The S&P 500 dropped 0.3% to 2724.44 and the Nasdaq Composite eased 0.2% to 7378.46.

In corporate news, shares of Micron Technology climbed 7.4% after the memory-chip maker unveiled a $US10 billion stock-buyback plan.

Shares of JC Penney fell 4% after chief executive Marvin Ellison said he was leaving the company to run Lowe’s. Shares of Lowe’s fell 1.4%.

The Stoxx Europe 600 edged up 0.3%. The UK’s FTSE 100 rose 0.2% to a record close, supported for most of May by gains in the US dollar against sterling and a rally in commodity prices that has lifted energy and mining stocks.

Italy’s FTSE MIB bounced 0.5% as two antiestablishment parties nominated a political novice, academic and lawyer Giuseppe Conte, to become the next prime minister.

France’s CAC 40 edged up 0.05% and Germany’s DAX climbed 0.7%.