* Markets dip, then recover following Fed Chair Powell’s speech
* Tech leads all three major U.S. indexes lower
* Allergan jumps on AbbVie’s $63 bln purchase announcement
* Indexes down: Dow 0.43%, S&P 0.59%, Nasdaq 1.00% (Updates to late afternoon)
By Stephen Culp
NEW YORK, June 25 (Reuters) - Wall Street lost ground on Tuesday as simmering trade concerns, combined with disappointing economic data, sent buyers to the sidelines, where they remained after Federal Reserve Chair Jerome Powell pushed back on pressure from President Donald Trump to cut rates.
All three major U.S. stock indexes were in the red, weighed most heavily by technology stocks, after Powell said the Fed was grappling with whether trade uncertainties and other issues support interest rate cuts.
Powell, speaking at the Council on Foreign relations, also reiterated the Fed’s independence, a day after Trump tweeted that the Fed “doesn’t know what it’s doing.”
Earlier, St. Louis Federal Reserve Bank President James Bullard in an interview with Bloomberg said he does not think the Fed needs to cut rates by a half-percentage point at its next policy meeting, in late July.
“You had a one-two punch,” said Art Hogan, chief market strategist at National Securities in New York. “Powell came out and warned against policy bending to short-term political interests, but it is also Bullard, who is a dissenter, saying 50 basis points would be too much.”
Bullard last week said he had dissented at the Fed’s June policy meeting because he felt that weak inflation and uncertainties about the economic outlook warranted a rate cut.
Despite Tuesday’s sell-off, June is shaping up to be a good month for U.S. equities. The benchmark S&P 500 continued to hover within a percent of the all-time high reached last Thursday.
Still, anxieties stemming from the U.S.-China trade war found no relief in a White House official’s remarks that Trump is “comfortable with any outcome” arising from a planned meeting with Chinese President Xi Jinping at the Group of 20 summit convening in Japan on Friday.
“The market...is really looking at two issues that push it higher,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. “One is the trade agreement and the other is Fed policy. It’s really trade policy that’s going to be more meaningful.”
On the economic front, sales of newly constructed homes and consumer confidence numbers both came in well below economist expectations, according to separate reports from the U.S. Commerce Department and the Conference Board.
Growing signs of economic softness, especially related to the trade disputes between the United States and its major trading partners, contributed to the Federal Reserve’s last week signaling that interest rate cuts could begin as early as July.
The Dow Jones Industrial Average fell 114.25 points, or 0.43%, to 26,613.29, the S&P 500 lost 17.36 points, or 0.59%, to 2,927.99 and the Nasdaq Composite dropped 80.27 points, or 1%, to 7,925.42.
Of the 11 major indexes in the S&P 500, 10 were in negative territory, with technology and communications services seeing the biggest percentage drops.
Rate-sensitive bank stocks were down 0.2%, as U.S. Treasuries benchmark yields fell below the closely watched 2% level.
AbbVie Inc said it would buy Allergan Plc for about $63 billion, sending the Botox maker’s shares up by 26.9%. AbbVie’s stock dropped 15.4%.
Declining issues outnumbered advancing ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favored decliners.
The S&P 500 posted 30 new 52-week highs and five new lows; the Nasdaq Composite recorded 22 new highs and 79 new lows. (Reporting by Stephen Culp Additonal reporting by Charles Mikolajczak and Sinead Carew Editing by Leslie Adler)