Stocks closed broadly lower Thursday after investors got rattled by a published report that cast doubt on the prospects for a long-term US-China trade deal.
Bond prices surged, sending yields sharply lower, as traders turned cautious. The stock sell-off was a marked shift from a day earlier, when the S&P 500 notched its second record high this week.
Still, the benchmark index closed out October with its second straight monthly gain as an easing of trade tensions and surprisingly good corporate earnings gave investors more confidence.
Industrial stocks led the selling Thursday after a published report raised concerns about the prospects of a comprehensive trade deal. That overshadowed remarks by President Trump, who said Thursday that both sides were working on finding a location to sign ‘‘phase one’’ of the trade deal.
The S&P 500 index fell 9.21 points, or 0.3 percent, to 3,037.56. The benchmark is on track for its fourth-straight weekly gain and is now up 21.2 percent this year.
The Dow Jones industrial average dropped 140.46 points, or 0.5 percent, to 27,046.23. It had briefly slumped 268 points.
The Nasdaq slid 11.62 points, or 0.1 percent, to 8,292.36. The Russell 2000 index of smaller-company stocks lost 10.40 points, or 0.7 percent, to 1,562.45.
Major stock indexes in Europe finished lower.
The flood of company earnings reports and a truce between the United States and China as the nations work to finalize ‘‘phase one’’ of a trade deal largely put investors’ worries about trade on the back burner this month. But a Bloomberg report on Thursday helped put investors in a selling mood. The report, citing unnamed sources, suggested Chinese officials are doubtful they will be able to reach a comprehensive, long-term trade deal.
The world’s two biggest economies have wrangled for more than 15 months over US allegations that China steals technology, forces businesses to hand over trade secrets, and unfairly subsidizes its technology companies in an aggressive drive to supplant American technological dominance.
They have imposed tariffs on hundreds of billions of dollars’ worth of each other’s goods in a trade fight that has slowed global economic growth.
Negotiators from both countries are trying to settle details of the phase one deal, which sidesteps some of the biggest issues dividing the countries.
‘‘You have the Chinese saying, ‘Gee, they’re not sure there’s a possibility for a long-term negotiation here, which is just another reminder that there are big issues still on the table,’’ said Paul Christopher, head of global market strategy for Wells Fargo Investment Institute. ‘‘A phase one deal is not really much of a deal at all.’’
Caterpillar and 3M helped pull industrial sector stocks broadly lower. Caterpillar fell 1.8 percent, and 3M dropped 2 percent.
Financial stocks also took heavy losses as bond yields made a significant move lower. The yield on the 10-year Treasury fell to 1.69 percent from 1.79 percent late Wednesday.
Yields were already falling in the early going and were given an extra shove lower following a surprisingly weak survey on business activity in the Midwest. A separate report showed that US consumer spending ticked up last month, though it came in below economists’ expectations.
Technology stocks also fell, despite solid gains from Apple following an encouraging earnings report. The iPhone maker rose 2.3 percent.
Utilities held up better than the rest of the market as investors moved money into safe-play holdings.
Communications stocks also bucked the broader market slide. Facebook gained 1.8 percent after releasing surprisingly good third-quarter results.
Benchmark crude oil fell 88 cents to settle at $54.18 a barrel. Brent crude oil, the international standard, dropped 38 cents to $60.23.