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Stocks dip into the red amid mixed trade signals

The three major U.S. stock indices ended Wednesday’s session mixed as investors reacted to conflicting signals about the path forward in U.S.-China trade talks.

The S&P 500 (^GSPC) fell 0.12%, or 3.6 points, as of market close Wednesday. The Dow (^DJI) slipped 0.04%, or 11.4 points, turning negative in the final minutes of trading. The Nasdaq (^IXIC) rose 0.32%, or 25.25 points.

Wednesday morning, U.S. Treasury Secretary Steven Mnuchin told CNBC that the U.S. and China “were about 90% of the way” to a trade agreement. He added that he was hopeful a deal could be reached by the end of the year.

“I think there’s a path to complete this,” Mnuchin said in an interview with the news outlet.

Mnuchin’s comments initially sent risk assets higher, with Dow futures up more than 100 points in early trading before paring gains. Safe haven assets – including gold (GC=F) and U.S. government bonds – stemmed gains from earlier in the week. The U.S. dollar climbed against the Japanese yen (USDJPY=X) and Swiss franc (USDCHF=X).

The remarks come as President Donald Trump and China’s Xi Jinping are set to attend the G20 summit in Osaka, Japan at the end of the week. Trump said last week that he and Xi would convene at the event, and that talks between the U.S. and Chinese delegations would re-start prior to their meeting.

Meanwhile, U.S. officials are willing to hold off on imposing another round of tariffs on about $300 billion worth of Chinese imports as trade talks resume, Bloomberg reported Tuesday, citing unnamed people familiar with the matter. This decision could reportedly be announced before Trump and Xi’s meeting at the G20 summit.

However, Trump told Fox Business on Wednesday that he would still be willing to impose additional tariffs on imports from China if a trade deal could not be reached.

The Office of the U.S. Trade Representative wrapped up public hearings on the proposed tariffs on the additional $300 billion worth of Chinese products Tuesday afternoon. Currently, tariffs on about $250 billion in goods from China are in effect.

Separately, oil prices surged Wednesday after the Energy Information Administration reported that U.S. crude supplies fell by a steeper-than-expected 12.8 million barrels during the week ending June 21. U.S. West Texas intermediate crude oil futures (CL=F) settled higher by 2.7% to $59.38 per barrel Wednesday after the report.

STOCKS

FedEx (FDX) said Tuesday that ongoing trade uncertainty would impact its business in the current fiscal year, while reporting better-than-expected earnings results for its fourth quarter. Alan B. Graf, Jr., CFO for the courier company, said in a statement that its fiscal 2020 performance “is being negatively affected by continued weakness in global trade and industrial production.” The company guided toward a mid-single-digit percentage point decline in diluted earnings per year for fiscal 2020, prior to its year-end MTM retirement plan accounting adjustment and excluding some integration expenses related to its acquisition of TNT Express.

Micron (MU) reported fiscal third-quarter results that topped consensus expectation as the semiconductor company suggested that demand for its products had rebounded. Third-quarter adjusted earnings of $1.05 per share beat expectations for 78 cents, while adjusted revenue of $4.79 billion was better than the $4.68 billion expected, according to Bloomberg data.

Like many U.S. chipmakers, the company has been hit by newly imposed restrictions on companies doing business with China’s Huawei. However, Micron CEO Sanjay Mehrotra said Tuesday that the company has “lawfully resumed shipping a subset of current products” to Huawei over the last two weeks “because they are not subject to export administration regulations and entity list restrictions.”

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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