US STOCKS-S&P 500, Nasdaq ease amid U.S.-China trade comments; on track for May gains

By Caroline Valetkevitch

NEW YORK May 30 (Reuters) - The S&P 500 and Nasdaq eased on Friday as U.S.-China trade worries kept investors on edge, but sharp gains this month put the S&P 500 on track to post its biggest monthly increase since November 2023.

The White House deputy chief of staff for policy said the Trump administration is preparing other actions to target China. U.S. President Donald Trump earlier posted that Beijing had "violated" its trade agreement with Washington.

Bloomberg reported that the Trump administration is planning to expand restrictions on China's tech sector to include subsidiaries of companies under U.S. curbs.

The Nasdaq led losses on Wall Street and technology .SPLRCT was down the most among S&P 500 sectors.

Trump's post on his Truth Social platform said China had breached an agreement with the U.S. to mutually roll back tariffs and trade restrictions for critical minerals, and issued a new veiled threat to get tougher with Beijing. He did not specify how China had violated the agreement.

Stocks pared losses as Trump said later on Friday he will speak to China's President Xi Jinping and hopefully work out their differences on trade and tariffs.

Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, said tariffs remain an issue for the market.

"The U.S-China trade talks supposedly have stalled again, and yet they have a meeting coming up as well," he said.

The Dow Jones Industrial Average .DJI rose 3.66 points, or 0.01%, to 42,220.94, the S&P 500 .SPX fell 17.43 points, or 0.29%, to 5,894.57 and the Nasdaq Composite .IXIC fell 146.39 points, or 0.75%, to 19,031.27.

Despite the losses, both the Nasdaq .IXIC and S&P 500 .SPX were on track for their biggest monthly gain since November 2023.

Data showed U.S. consumer spending increased 2.1% year-on-year in April after advancing 2.3% in March. The Federal Reserve tracks the PCE price measures for its 2% inflation target.

Traders maintained bets that the U.S. central bank would cut its target for short-term borrowing costs in September.

May has been a volatile month for stocks as Trump's on-and-off trade policies kept investors on edge, but his softening tariff stance, along with upbeat earnings and tame inflation data, had helped the S&P 500 rebound from its April lows.

U.S. equities initially rallied on Thursday, after the Court of International Trade ruled late on Wednesday to effectively block most levies imposed since January, without addressing some industry-specific tariffs.

However, a federal appeals court on Thursday temporarily reinstated most of the tariffs and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9.

Among other big movers on the day, Ulta Beauty ULTA.O jumped after the cosmetics retailer raised its annual profit forecast after beating quarterly results.