U.S. stocks mostly finished higher on Tuesday after President Donald Trump suggested a trade deal with China could happen soon but did not offer clarity on a rollback of import tariffs.
In a largely political speech in New York, Trump claimed credit for economic growth, low unemployment, and a stock market at record highs, but again attacked Federal Reserve monetary policy before claiming that a U.S. - China trade deal was “close”.
How are the major benchmark stock indexes performing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.00% finished unchanged at around 27,691.49, the first completely flat close since April, 24, 2014. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.50% advanced around 5 points, a gain of less than 0.2%, to finish near 3,091.84, near to its previous all-time closing high of 3093.08 set on Nov. 8. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +2.30% added 22 points, or 0.3%, to end at 8,486.09, surpassing its previous all-time close.
The S&P 500 and Nasdaq carved out fresh intraday records earlier in the day.
On Monday, the Dow finished up around 10 points, or less than 0.1%, to 27,691.49, the S&P 500 index declined 6 points, or 0.2%, to 3,087.01, while the Nasdaq Composite Index fell 11 points, or 0.1%, to 8,464.27.
What’s driving the market?
Markets have been keenly focused on trade negotiations between the U.S. and two of its major counterparts, Europe and China.
At the Economic Club of New York, President Donald Trump said a “significant phase one” trade deal could happen soon, but that he would only accept it if the agreement worked to the advantage of U.S. workers and businesses. He also blamed Fed policy tightening for impeding the economy’s progress and the benefits of his tax cuts.
News reports also suggested Trump may put off for another six months a decision on whether to place tariffs of up to 25% on European auto imports, ahead of the Wednesday deadline.
Comments on trade were closely watched after Trump, over the weekend, said discussions with China and the U.S. were going “very nicely,” but cautioned that recent reports about an agreement to roll back tariffs, as a part of a preliminary trade resolution, weren’t accurate.
“During the past couple of trading sessions, fear has creeped in that phase one of the U.S.-China trade talks seems to be delayed if not in danger of not coming to fruition,” Kristina Hooper, chief global markets strategist at Invesco told MarketWatch.
Meanwhile, Federal Reserve Vice Chairman Richard Clarida theorized about global bond yields remaining around historically lower levels "that are substantially lower than the precrisis experience, and thus substantially closer to the effective lower bound for the policy rate than they were before the crisis,” in prepared remarks at a policy conference in Zurich.
The Fed No. 2’s comments speak to challenges that the rate-setting Federal Open Market Committee faces in the coming months as it weigh attempts to stave of a recession, with federal-fund rates at a 1.50%-1.75% range after three straight cuts by policy makers in as many meetings.