17.05.201821:00:00UTC+00Wall Street Retreats after Trump's Remarks on Trade Talks

Stocks dropped on Thursday after President Donald Trump indicated trade talks between the U.S. and China may not be successful. A popular index of small-capitalization stocks closed at a record for the second consecutive day, highlighting the resilience of that segment of the market amid worries about trade wars and rising rates.

The Dow Jones industrial average closed 54.95 points lower at 24,713.98, with Cisco Systems and Walmart dropping 3.8 percent and 1.9 percent, respectively. The S&P 500 fell 0.1 percent to 2,720.13 as tech declined 0.5 percent. The Nasdaq composite slipped 0.2 percent to 7,382.47 with Amazon, Netflix, Apple and Alphabet all dropping.

The small-cap benchmark Russell 2000 index RUT, climbed 0.6 percent on the day, hitting its second consecutive closing record at 1,625.29, up 0.6 percent.

"Will that be successful? I tend to doubt it," Trump said Thursday afternoon as the U.S. and China kicked off the second round of trade talks. "The reason I doubt it is because China has become very spoiled. The European Union has become very spoiled. Other countries have become very spoiled, because they always got 100 percent of whatever they wanted from the United States."

Tech shares hit their session lows after Trump made his remarks. The Technology Select Sector SPDR ETF (XLK) fell 0.5 percent. Cisco Systems Inc. lost 3.8 percent after services revenue at the networking giant missed Wall Street expectations in earnings late Wednesday. The stock, a Dow component, added the most pressure on the overall market.

The S&P 500's defensive sectors continued to struggle, with utilities losing 0.9 percent and real estate down 0.5 percent. These industries have declined amid the rise in bond yields, as rising rates make the higher-than-average dividend yields of these companies less attractive to income-seeking investors.