(AP) -- Stocks closed broadly lower on Wall Street Wednesday as investors turned anxious about the possibility that the U.S. and China may not reach a trade deal before next year.
Technology stocks took the heaviest losses. Communication services and industrial stocks also were big losers. Banks fell as bond yields declined. Energy stocks notched the biggest gains as crude oil prices rebounded.
A published report suggested a "phase one" trade pact may not be completed this year as negotiators continue to wrestle over differences. Beijing is pressing Washington to agree to broader tariff rollbacks on Chinese goods.
Investors have been hoping the world's two biggest economies can make a deal before new and more damaging tariffs take effect Dec. 15 on about $160 billion in Chinese imports. Those duties would cover smartphones, laptops and other consumer goods.
"If a deal is not going to get done before the end of the year, then all of a sudden this uncertainty comes back in around what's going to happen around December 15," said Scott Ladner, chief investment officer at Horizon Investments. "Are the tariffs back on the table again? The market has certainly come to expect that those are not going to happen."
The selling nudged the major U.S. stock indexes off their recent all-time highs.
The S&P 500 index dropped 11.72 points, or 0.4%, to 3,108.46. The Dow Jones Industrial Average lost 112.93 points, or 0.4%, to 27,821.09. The index was briefly down 258 points.
The Nasdaq slid 43.93, or 0.5%, to 8,526.73. The Russell 2000 index of smaller company stocks gave up 6.68 points, or 0.4%, to 1,591.61.
Major stock indexes in Europe also closed lower.
Growing optimism among investors that the U.S. and China were making progress toward a limited trade deal helped pave the way for gains in the market in recent weeks, including a string of all-time highs for the major stock indexes.
That optimism dimmed Wednesday as investors weighed the implications of more tariffs kicking in next month.
The two countries have raised tariffs on billions of dollars of each other's goods in the fight over China's trade surplus and technology ambitions. That weighs on trade worldwide and threatens to depress corporate earnings and global economic growth, which has already showed signs of slowing.
President Donald Trump said Tuesday he was prepared to raise tariffs on Chinese exports if the nations can't reach an agreement on trade.
The Senate may have complicated the path to a deal Wednesday, when it passed a resolution in support of human rights in Hong Kong following months of antigovernment protests. China condemned the move and threatened "strong countermeasures."
Technology and communication services companies were among the biggest losers Wednesday. HP fell 2% and AT&T slid 2.2%.
Citigroup dropped 1.2% as financial stocks fell along with bond yields. The yield on the 10-year Treasury slid to 1.74% from 1.78% late Tuesday. Falling bond yields hurt banks because they are a benchmark for the interest rates lenders charge on mortgages and other loans.
Energy companies held up better than the rest of the market as oil prices climbed 3.4%. ConocoPhillips rose 3.8%.
Benchmark crude oil rose $1.90 to settle at $57.11 a barrel. Brent crude oil, the international standard, gained $1.49 to close at $62.40 a barrel.
Utilities, real estate companies and makers of household goods also rose as traders favored less-risky and higher-dividend paying stocks.
Investors also had their eye on the latest batch of quarterly results from big retailers.
Target surged 14.1% after handily beating Wall Street's third-quarter earnings estimates. The retailer also raised its profit forecast for the year.
Lowe's rose 3.9% after raising its profit forecast for the year following a solid third quarter. The home improvement retailer has been working to improve profit and sales to better compete with rival Home Depot, which on Tuesday cut its profit forecast after reporting disappointing earnings. The stock dropped 2.2%.
Urban Outfitters plunged 15.2% after the clothing and accessories retailer fell short of Wall Street's third-quarter profit and sales forecasts.
In other commodities trading, wholesale gasoline rose 6 cents to $1.66 per gallon. Heating oil climbed 3 cents to $1.89 per gallon. Natural gas rose 5 cents to $2.56 per 1,000 cubic feet.
Gold was unchanged at $1,473.30 per ounce, silver was unchanged at $17.10 per ounce and copper was unchanged at $2.65 per pound.
The dollar rose to 108.64 Japanese yen from 108.53 yen on Tuesday. The euro weakened to $1.1070 from $1.1078.