US stocks have edged lower as videogame makers gave disappointing revenue forecasts and investors awaited developments on US-China trade relations.

The benchmark S&P 500 and the Nasdaq were weighed by declines in shares of Electronic Arts Inc, which tumbled 13.3 per cent after the videogame publisher forecast full-year revenue below Wall Street estimates. The sharp drop pulled down shares of rival videogame publisher Activision Blizzard, which fell 10.1 per cent. Shares of industry peer Take-Two Interactive Software Inc also dropped sharply, 13.8 per cent, after the company’s similarly underwhelming forecast.

The slump in videogame stocks contributed to a 1.5 per cent decline in the S&P 500 communication services sector, the largest drop among the S&P’s major sectors. Despite the fall, Wall Street’s indexes remained near two-month highs. A 7.3 per cent gain in the S&P 500 would put the index above its record closing September high. Investors cited a void of catalysts for market gains.

The Dow Jones Industrial Average fell 21.22 points, or 0.08 per cent, to 25,390.3, the S&P 500 lost 6.09 points, or 0.22 per cent, to 2,731.61 and the Nasdaq Composite dropped 26.80 points, or 0.36 per cent, to 7,375.28.

US Treasury Secretary Steven Mnuchin said trade talks with China last week were “very productive” and confirmed that he and other officials will travel to Beijing for the next round of meetings. Federal Reserve Chairman Jerome Powell will speak on Wednesday in Virginia.

Though the major indexes drooped, the Philadelphia SE Semiconductor Index advanced 2.6 per cent. Shares of Apple supplier Skyworks Solutions Inc jumped 11.5 per cent after the company announced $US2 billion ($2.8 billion) in stock buybacks, while shares of Microchip Technology rose 7.3 per cent after the company suggested the chipmaker industry was close to recovery from its recent downturn.

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