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story.lead_photo.caption A trader takes a break Tuesday outside the New York Stock Exchange, where stocks tumbled in a sell-off that began after a series of tweets by President Donald Trump, who warned China that “I am a Tariff Man.”

Stocks tanked Tuesday as the goodwill generated by a truce between the U.S. and China over trade evaporated over confusion about what the two sides had actually agreed upon.

The Dow Jones industrial average fell nearly 800 points. The yield on the benchmark 10-year Treasury note declined to its lowest level in three months, a signal that the bond market is worried about long-term economic growth.

The sell-off short-circuited a recent rally on Wall Street. The market gained Monday after President Donald Trump's administration said the U.S. and China agreed to a temporary truce in a trade dispute. Last week, stocks jumped when the Federal Reserve's chairman indicated that the central bank could slow the pace of interest rate increases.

On Tuesday, investors' confidence in the U.S.-China agreement faltered after a series of confusing and conflicting words from Trump and some senior officials. That contributed to renewed fears that the disagreement between the two economic powerhouses could slow the global economy.

The S&P 500 index slid 90.31 points, or 3.2 percent, to 2,700.06. The Dow plunged 799.36 points, or 3.1 percent, to 25,027.07, more than erasing its 488-point gain over the previous two trading days. It was down as much as 818 points earlier.

The technology-heavy Nasdaq composite lost 283.09 points, or 3.8 percent, to 7,158.43.

Small-company stocks, which investors see as more risky than large multinationals, fell more than the rest of the market. The Russell 2000 index gave up 68.21 points, or 4.4 percent, to 1,480.75.

Trump, in a series of Twitter posts Tuesday, threatened to impose a variety of import penalties on Chinese products if they did not make major changes in their economic relationship with the United States.

"President Xi and I want this deal to happen, and it probably will," Trump wrote. "But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power."

This is a much different characterization of the China talks than just three days ago, when Trump had dinner with China's president at a meeting of the Group of 20. After the dinner, Trump said they reached the framework of a deal that would come together in 90 days.

"It's an incredible deal," Trump told reporters after the dinner. "It goes down, certainly, if it happens, it goes down as one of the largest deals ever made."

He later said China had committed to buying large amounts of U.S. agricultural products and completely removing all tariffs on U.S. automobiles, a big shift from its current 40 percent penalty. Chinese officials, meanwhile, did not confirm any of those details. They wouldn't even acknowledge that there was a 90-day deadline under which they were operating.

In the past 24 hours, there were signs that White House officials were beginning to backpedal from some of their initial optimism. In his Twitter posts Tuesday, Trump said they might need an extension if the 90-day timeline doesn't prove sufficient.

"This trade issue is the big overhang, the biggest ceiling, if you will, to keeping the markets from moving higher," said Randy Frederick, vice president of trading and derivatives at Charles Schwab.

Technology companies, banks and industrial stocks accounted for much of the broad sell-off on the stock market. Utilities stocks rose. Smaller-company stocks fell more than the rest of the market.

Big losses for Boeing and Caterpillar, major exporters that would stand to lose much if trade tensions persist, weighed on the Dow.

The bond market signaled its concerns as the gap between two-year and 10-year Treasuries reached its narrowest difference since 2007. The 10-year yield is still higher, but not by much.

When yields for long-term bonds drop lower than yields for short-term bonds, it's what economists call an "inverted yield curve." It indicates that investors are forecasting a weaker economy and inflation in coming years. An inverted yield curve has also preceded each recession of the past 60 years, though sometimes by more than a year.

"You have the drop in bond yields and the implications on growth going forward," said Willie Delwiche, investment strategist at Baird.

The sell-off came ahead of today's closure of U.S. stock and bond markets in observance of a national day of mourning for former President George H.W. Bush.

The turn in the markets followed a strong rally Monday fueled by optimism over the news from the G-20 summit. That optimism quickly faded as skepticism grew that Beijing will yield to U.S. demands anytime soon.

"The actual amount of concrete progress made at this meeting appears to have been quite limited," Alec Phillips and other economists at Goldman Sachs wrote in a research note.

Moody's Investors Service suggested in a report Tuesday that despite the latest U.S.-China talks, both countries remain far from resolving their dispute.

"Narrow agreements and modest concessions in their ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests," Moody's analysts wrote.

The trade dispute has rattled markets in recent months as signs emerged that it has begun affecting corporate profits. That's stoked traders' fears that if it drags much longer it could further weigh on global economic growth.

"There are plenty of reasons to believe that growth in either the economy or the markets is going to soften next year," Frederick said.

Meanwhile, markets also got a bit of a jolt Tuesday from remarks by John Williams, president of the Fed's New York regional bank. During a briefing with reporters, Williams said that, given his outlook for strong economic growth, he continues to "expect that further gradual increases in interest rates will best sponsor a sustained economic expansion."

Williams' comments seemed to counter Fed Chairman Jerome Powell's remarks from last week.

The jitters helped drive demand for government bonds Tuesday, pushing prices higher. The yield on the 10-year Treasury note fell to 2.91 percent from 2.99 percent late Monday, a large move. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks. Citigroup fell 4.5 percent to $62.26.

Chip-makers were among the biggest decliners in a technology sector slide. Advanced Micro Devices dropped 10.9 percent to $21.12, while Micron Technology lost 7.9 percent to $36.88.

Home builders fell after luxury home builder Toll Brothers issued a cautious assessment of the housing market. Toll's shares slid 1.6 percent to $32.99.

Apple lost 4.4 percent to $176.69 after the consumer electronics giant was downgraded by HSBC analysts, citing the possibility that iPhone volume and value growth may moderate because of a saturated mobile phone market.

United Parcel Service slumped 7.4 percent to $106.77, and FedEx dropped 6.3 percent to $215.52. Morgan Stanley analysts said in a note that the market was underestimating the challenge those companies would face from Amazon Air.

The dollar weakened to 112.82 yen from 113.69 yen late Monday. The euro was little changed at $1.1342. The British pound fell to $1.2716 from $1.2728.

Information for this article was contributed by Alex Veiga and Martin Crutsinger of The Associated Press; by Alan Rappeport of The New York Times; and by Damian Paletta and David J. Lynch of The Washington Post.

A Section on 12/05/2018

Print Headline: Stocks tumble as trade-truce details muddy; Trump, aides’ mixed signals raise U.S.-China red flags

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