By Riva Gold and Amrith Ramkumar 
   -- Bond prices, yen gain 
 
   -- OPEC news trips up oil prices 
 
   -- Tiffany, Ralph Lauren and Lowe's up on earnings 

The Dow Jones Industrial Average fell Wednesday while safer assets including government bond prices and the yen rose as investors continued to assess a range of trade tensions and a drop in commodity prices.

The Dow industrials declined 104 points, or 0.4%, to 24730. The S&P 500 fell 0.2%, and the Nasdaq Composite dropped less than 0.1%.

The Dow and S&P 500 closed at their highest level in two months on Monday before falling Tuesday afternoon.

Uncertainty over a U.S. agreement with China over telecom giant ZTE and reports that talks to renegotiate the North American Free Trade Agreement have reached a stalemate have hurt stocks in recent sessions.

Some analysts worry that protectionist trade activity will lead to slower activity and ultimately a weaker global economy, hurting a wide range of assets including stocks and commodities.

The Senate Banking Committee approved legislation Tuesday to tighten national-security reviews of Chinese technology companies, strengthen export controls and prohibit the Trump administration from lifting stiff penalties imposed on ZTE.

Industrial stocks, which rallied Monday on news the U.S. would suspend efforts to apply tariffs on $150 billion in Chinese imports, have helped lead recent declines in the U.S.

"[Trade] risk is going to be more impactful to the market than others because this does directly impact the economy," said Katie Nixon, chief investment officer at Northern Trust Wealth Management. "You'll continue to see market moves ebb and flow with trade news, whether it's the U.S. and Europe over steel and aluminum tariffs or with China."

Investors were also parsing reports that President Donald Trump is weighing measures to cut European Union steel and aluminum exports to the U.S. by about 10%.

Commodities and the companies that produce them fell, as investors sold a wide range of risky assets. U.S. crude oil fell 0.5% amid worries that the Organization of the Petroleum Exporting Countries could decide to ramp up production at its next official meeting in June, while copper futures declined 1.0%.

"I think the market is trying to interpret" the latest trade developments, said Steven Chiavarone, assistant vice president and portfolio manager at Federated Investors. "The market got excited when they thought the tensions were easing, now they've gotten a bit nervous."

Still, he added that he thinks the earnings and economic backdrop will lift stocks as worries about trade fade.

Haven assets such as bonds and the yen climbed. The yield on the benchmark 10-year U.S. Treasury note fell to 3.017%, according to Tradeweb, from 3.065% Tuesday. Yields fall as prices rise.

Investors were awaiting minutes from the Federal Reserve's May meeting, scheduled to be released later Wednesday, for the latest clues about the central bank's path for higher interest rates. Bets that the central bank might raise rates three more times instead of two have recently buoyed the dollar and contributed to worries about tighter financial conditions.

On Wednesday, the WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, added 0.4% to a fresh year-to-date high.

Despite anxiety over trade and interest rates, some investors expect robust earnings growth to lift stocks moving forward.

Tiffany, Ralph Lauren and Lowe's were among the best performers in the S&P 500 following their latest earnings reports, while Target was among the biggest laggards after the retailer said higher spending pinched profit margins.

Elsewhere, the Stoxx Europe 600 fell 1.1%. Europe's auto sector, often seen as a potential target in trade spats, was among the biggest decliners, while the euro fell 0.7% against the dollar.

Italian stocks also remained under pressure amid concerns the prospective antiestablishment government there will stake out anti-euro positions and start a spending binge. Italy's FTSE MIB Index fell 1.3%, while Italian 10-year government bond yields extended their recent climb.

Stocks across Asia mostly fell earlier. Japan's Nikkei Stock Average shed 1.2% in its biggest daily decline since March. Hong Kong's Hang Seng fell 1.8% and Shanghai stocks fell 1.4%.

Joanne Chiu contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

May 23, 2018 12:28 ET (16:28 GMT)

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