- Stocks gain amid the U.S.-China trade negotiations
- Reports heighten S&P 500 and Nasdaq shares
- Stocks trade higher as Federal Reserve start their meeting
Stocks experienced a fluctuation on Tuesday as investors speculated the results of the U.S.-China trade negotiations.
Quoting persons familiar with the matter, Bloomberg reports that the U.S. officials were worried that China might be pushing back against their projections in their ongoing meeting. Reports also postulate that the Chinese negotiators were concerned that the tariffs posted on their goods will be lifted once negotiations are over.
These reports allegedly knocked down the Dow as it shaved its points after being up close to 200 points. Conversely, the 30-stock index resumed some of its gains to trade at 50 points higher after reports by Dow Jones stated that the talks were in the final stages, noting that China’s Vice Premier Liu will travel to Washington in the upcoming weeks.
Not left behind by these reports were Nasdaq and S&P 500 which traded with 0.4 percent index.
Caterpillar and Boeing Show Positive Improvements
Shares by Caterpillar traded shortly at a disadvantaged rate before equalling out at 0.2 percent higher. Losses were recorded by Boeing before shooting up by 0.8 percent. These stocks were considered to be at an advantage because of their exposure to overseas markets.
News surrounding the talks turned positive with a deal expected to come to fruition between March and April.
Randy Frederick, vice president of trading and derivatives at Charles Schwab, said investors have grown complacent as this issue — along with Brexit in Europe — have yet to be fully resolved.
“I feel like the market is pricing in a best-case scenario on both of these things,” Frederick said. “This is a good time to be a little bit cautious rather than jumping on board with this rally as it is.”
He added:
“We’ve had a tremendous run in the S&P 500 since Dec. 26. We’re only a few percentage points away from an all-time high. I’m not saying we won’t see an all-time high this year, but to have it happen this quickly is a bit surprising.”
Shares Rise as the Meeting on Policy by Federal Reserve Begins
Initial reports indicated that stocks traded higher on Tuesday as the Federal Reserve kick-started their two-day policy meeting. A zero hike in the market was expected with no change in policy being overseen by most investors. Investors will, however, look for clues on the Fed’s economic outlook.
Interest will be expected to be on the forecast with “dot plots” for the Fed, with little or no further tightening in 2019. The U.S. central bank is expected to take on a cautious tone as the market shows signs of slowing down.
“My expectations are that the Fed will maintain their dovishness,” said Gregory Faranello, head of rates at Roberts & Ryan. “The eyes will be on the dot plot, so I expect some tempering there as well.”
He concluded:
“The one potential area of concern would be if the data were not cooperating with the pivot. When we look at what’s going on a global basis, [Fed Chairman Jerome Powell] has pointed to the headwinds, and those headwinds are still there.”
