U.S. Markets open in 6 hrs 37 mins

U.S. Stock Market Rally Fizzles Amid Confusion Over Trade Deal

James Hyerczyk
Supporting the U.S. stock markets early in the session were the start of the U.S. Federal Reserve monetary policy meeting. Going into Wednesday’s key Fed announcements, investors are pricing in zero chance of a rate hike. Additionally, investors aren’t looking for much change in the central bank’s monetary policy statement.

The major U.S. stock indexes closed mixed on Tuesday with the S&P 500 Index and the Dow Jones Industrial Average posting losses and the NASDAQ Composite holding on to produce a small gain. Early session strength was erased late in the day as sellers dominated the trade in reaction to conflicting reports over the progress of U.S.-China trade negotiations.

In the cash market, the benchmark S&P 500 Index settled at 2832.57, down 0.37 or -0.01%. The blue chip Dow Jones Industrial Average finished at 25887.38, down 26.72 or -0.10% and the technology-based NASDAQ Composite closed at 7723.95, up 9.47 +0.13%.

The Dow Jones Industrial Average was up about 200 points early in the session on the back of a report which said that trade talks between the United States and China were in the final stages with the announcement that China Vice Premier Liu He will travel to Washington in the next few weeks.

However, the blue chip Dow began to retreat from its highs after Bloomberg News initially reported, citing people familiar with the matter, that U.S. officials are worried China may be pushing back against U.S. demands in the countries’ ongoing trade talks. The report also said Chinese negotiators are worried they have not received assurances that tariffs imposed on Chinese goods would be lifted once a deal is struck.

Supporting the U.S. stock markets early in the session were the start of the U.S. Federal Reserve monetary policy meeting. Going into Wednesday’s key Fed announcements, investors are pricing in zero chance of a rate hike. Additionally, investors aren’t looking for much change in the central bank’s monetary policy statement.

The Federal Open Market Committee’s (FOMC) economic productions are the main concerns for investors at this meeting. Investors expect the Fed to lower its interest rate forecasts to show little or no chance at further tightening in 2019. Most expect the Fed to maintain its cautious tone and its call to be “patient” in the wake of the slowing global economy.

In other news, the Dow snapped a 4-day winning streak while forming a potentially bearish closing price reversal bottom. Leading the blue chip average lower were shares of J.P. Morgan Chase, which fell 0.5 percent. Apple stock also retreated after a stellar week-long rally. The technology giant finished 1 percent lower.

The negative news about U.S. – China trade relations pressured Caterpillar and Boeing, two stocks seen as trade bellwethers given their exposure to China’s markets.

This article was originally posted on FX Empire

More From FXEMPIRE: