No Trade Deal with China Yet; S&P 500 Loses its Streak
Stock markets closed low on Tuesday as trading closed off, with the S&P 500 losing its winning streak.
Quick overview
- China and the United States have not reached an agreement on tariffs, leading to a decline in the stock market.
- The S&P 500 ended its six-day winning streak with a loss of 0.30%, while the Dow Jones and Nasdaq also fell.
- The Federal Reserve is expected to maintain current interest rates during their upcoming meeting, which could further impact the stock market.
- If no trade deal is reached by the Friday deadline, President Trump may extend it to avoid escalating tensions with China.
Investors need to know that China has not yet come to an agreement with the United States over tariffs while the Friday deadline looms, causing the stock market to decline.
The S&P 500 closed off Tuesday low, ending its six-day winning streak with a loss of 0.30% for the day. The rest of the market indices were low as well, with the Dow Jones losing 0.46% and the Nasdaq Composite falling 0.38% in a rough day for the market that has investors worried leading up to Wednesday’s Federal Reserve meeting.
The Federal Reserve is likely to keep interest rates as they are, says the FedWatch tool on CME. The meeting is scheduled for 2p.m. on Wednesday, with an announcement from Chairman Jerome Powell at 2:30p.m. If there are no new interest rate cuts, then the stock market could dip further than it is right now. With Powell and President Donald Trump butting heads recently, analysts will be watching closely to see what Powell says about Trump in his latest speech.
No Chinese Deal
This week, the United States and China began trade talks over new tariffs, but no deal has been reached so far. This could become a problem if China misses the Friday deadline that Trump has given to a number of countries, and then Trump’s new tariffs go into effect for China. If that happens, it could anger the Chinese government and make it harder for them to reach an agreement with the United States.
What is likely to happen, however, if the two countries cannot reach an agreement by Friday, is that Trump may extend the deadline, specifically for China to give them more time. As China is a very important trade partner, Trump may desire more tariff fees from them but will not want to spark off a serious trade war that makes Trump look like a bad businessman.
It is highly likely that the stock market will dip lower today, but with recent record highs from Nasdaq and S&P 500, that may not be as bad as it looks initially. A short downturn could be just what the market needs to spur quick upward growth in response.
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