US stocks ended lower on Friday as investors were cautious going into next week’s US Federal Reserve meeting, while a warning from Broadcom Inc of a broad weakening in global demand weighed on chipmakers and added to US-China trade worries.
Shares of Broadcom fell 5.6 percent after it cut its full-year revenue forecast by US$2 billion, blaming the US-China trade conflict and export curbs on Huawei Technologies Co (華為).
Other chip companies, which both source product and sell heavily in China, dropped sharply.
The Philadelphia Semiconductor index tumbled 2.6 percent.
Investors are bracing for next week’s Fed meeting in light of recent market expectations that the central bank could cut interest rates as much as three times this year.
Some strategists have said stocks are primed for a selloff should the Fed fail to take an even more dovish tilt.
The S&P 500 index has so far gained 4.9 percent this month and registered a second straight week of gains on Friday, largely on the rate cut hopes.
“We’re going to be on pins and needles until we get some indication from the Fed,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
“That’s what matters. Everybody is betting that the Fed is going to cut rates, probably not in June but soon. That is a very crowded trade,” he said.
The ongoing trade row also gave investors reason to play it safe ahead of the weekend.
“This is kind of a wait-and-see mode. People are staying very close to their benchmarks,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.
The G20 summit at the end of this month might yield progress on a deal.
The Dow Jones Industrial Average on Friday fell 17.16 points, or 0.07 percent, to 26,089.61, the S&P 500 lost 4.66 points, or 0.16 percent, to 2,886.98 and the NASDAQ Composite dropped 40.47 points, or 0.52 percent, to 7,796.66.
All three major indices posted gains for the week: the Dow rose 0.4 percent, the S&P 500 gained 0.5 percent and the NASDAQ added 0.7 percent.
During the session, shares of Apple Inc slipped 0.7 percent, with Broadcom a major supplier to the iPhone maker.
Adding to global demand worries, Chinese data pointed to the worst slowdown in industrial growth in 17 years. China’s industrial output growth last month slowed below expectations and showed signs of weakening demand.
In a bright spot, data showed that US retail sales increased last month and sales for the prior month were revised higher, suggesting a pickup in consumer spending that could ease fears the economy was slowing down sharply in the second quarter.
Online pet products retailer Chewy Inc ended up 59 percent in its market debut, joining a host of high-profile names, such as Lyft Inc and Uber Technologies Inc, that listed on US stock exchanges this year.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 1.53-to-1 ratio; on NASDAQ, a 1.79-to-1 ratio favored decliners.
The S&P 500 posted 37 new 52-week highs and three new lows; the NASDAQ Composite recorded 47 new highs and 82 new lows.
Volume on US exchanges was 5.85 billion shares, compared with the 6.83 billion average for the full session over the past 20 trading days.
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