Wall St subdued by China trade uncertainty, Alphabet up

Wall Street's main indexes were muted in choppy trading, as investors struggled with little clarity on the US-China trade front despite signs of a possible softening in Beijing's stance.

On a brighter note, Alphabet leapt 3.6 per cent after the Google-parent reported upbeat first-quarter results, easing investor worries about returns on hefty artificial intelligence-focused investment.

The overall mood, however, became jittery after US President Donald Trump said in an interview he would consider it a "total victory" if the country had tariffs as high as 50 per cent on foreign imports a year from now.

Trump also said his administration is talking with China to strike a tariff deal and that Chinese President Xi Jinping has called him. Beijing, however, continues to dispute that negotiations are taking place.

The conflicting headlines offset some optimism after China granted some US imports exemptions from its hefty 125 per cent tariffs, according to businesses notified.

"It's more of the market just kind of waiting and seeing how things actually progress," said Clayton Allison, portfolio manager at Prime Capital Financial.

"Everybody's trying to kind of figure out what's true, what's kind of political theatre and (it) really just feels more and more like headline volatility more than anything."

In early trading on Friday, the Dow Jones Industrial Average fell 45.20 points, or 0.11 per cent, to 40,048.20, the S&P 500 gained 6.09 points, or 0.11 per cent, to 5,490.86 and the Nasdaq Composite gained 29.72 points, or 0.17 per cent, to 17,195.76.

Alphabet's first-quarter results also lifted social media companies, with Meta Platforms rising 1.6 per cent. The communication services sector was up 1.5 per cent.

Most megacap and growth stocks also gained, buoying the tech-heavy Nasdaq.

Alphabet was "shaking off the whole narrative that they're getting impacted by the ongoing trade war," Allison said.

Intel dropped 7.3 per cent following the chipmaker's dour forecast, while T-Mobile fell 8.2 per cent after adding fewer wireless subscribers than expected in the first quarter, both among the biggest drags on the S&P 500.

Indexes rose for the third consecutive session on Thursday - the best winning streak for the S&P 500 since Trump's April 2 "Liberation Day" tariff announcement - and were set for strong weekly gains.

The S&P 500 is so far up four per cent for the week, while the Nasdaq Composite and the Dow have risen 5.6 per cent and 2.4 per cent, respectively, mainly driven by hopes of de-escalating US-China trade tensions, Trump's backtracking on threats to fire the head of the Federal Reserve and some upbeat corporate results.

However, sentiment remains highly cautious amid indications of a souring economic outlook and hits to company earnings from tariffs.

The benchmark index remains below levels prior to the April 2 announcement, and is over 10 per cent off its February record close.

AbbVie rose two per cent after the drugmaker raised its annual profit forecast on strong sales of its newer immunology drugs.

Declining issues outnumbered advancers by a 1.36-to-1 ratio on the NYSE and by a 1.63-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and three new lows, while the Nasdaq Composite recorded 14 new highs and 21 new lows.