Wall Street dips as investors focus on US jobs data
US stocks have dipped, dragged down by Tesla's shares, while investors looked ahead to the monthly jobs report to gauge the health of the labour market amid concerns of an economic slowdown.
Chinese President Xi Jinping held talks with US President Donald Trump by phone, China's state-run news agency Xinhua reported, as bilateral relations have been strained by trade disputes.
The call comes amid accusations between the US and China in recent weeks over critical minerals in a dispute that threatens to tear up a fragile truce in the trade war between the governments of the two biggest economies.
Weaker-than-expected US private payrolls and services sector data on Wednesday raised concerns about the effects of Trump's erratic trade policies, with investors focusing squarely on Friday's non-farm payrolls report.
Initial jobless claims data showed people in the US filing new applications for unemployment benefits last week rose for a second straight week.
"I don't think it's some sort of big warning sign right now but it speaks to the fact that the labour market has been softening more and just getting gradually weaker," said Kevin Gordon, senior investment strategist at Charles Schwab.
The jobs report comes ahead of the Federal Reserve's policy decision later this month, where policy makers are widely expected to hold interest rates.
Despite continued calls from Trump to slash interest rates, Fed chair Jerome Powell has opted to stand pat so far, awaiting further data to help dictate the policy decision as tariff volatility prevails.
US equities rallied sharply in May, with investors boosting the S&P 500 index and the tech-heavy Nasdaq to their biggest monthly percentage gain since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.
The S&P 500 remains nearly 3.0 per cent below record highs touched in February.
US central bank officials including Fed Board governor Adriana Kugler, Fed Kansas City president Jeffrey Schmid and Fed Philadelphia president Patrick Harker are scheduled to speak later in the day.
In early trading on Thursday, the Dow Jones Industrial Average fell 126.69 points, or 0.30 per cent, to 42,301.05, the S&P 500 lost 12.71 points, or 0.21 per cent, to 5,958.10 and the Nasdaq Composite lost 31.13 points, or 0.16 per cent, to 19,429.36.
Eight of the 11 major S&P 500 sub-sectors fell, with consumer staples declining the most with an about 1.0 per cent fall.
Brown-Forman fell 14.9 per cent, the most on the S&P 500, after the Jack Daniel's maker forecast a decline in annual revenue and profit.
Procter & Gamble said it will cut 7000 jobs, or about 6.0 per cent of its workforce, over the next two years, as part of a restructuring.
Shares of the consumer goods bellwether fell 1.3 per cent.
Tesla fell 4.5 per cent, touching an over three-week low.
The car maker's sales dropped for the fifth straight month in several European markets, data early this week has showed.
Declining issues outnumbered advancers by a 1.08-to-1 ratio on the NYSE and by a 1.46-to-1 ratio on the Nasdaq.
The S&P 500 posted 12 new 52-week highs and three new lows while the Nasdaq Composite recorded 37 new highs and 16 new lows.
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