The stock market’s near-paralysis continued on Tuesday, leaving the Dow tilting sideways ahead of a pivotal Trump speech that Wall Street will scrutinize for clues about the true state of the US-China trade deal.
Wall Street’s major indices traded flat following the opening bell.
The Dow Jones Industrial Average bounced around its previous-day close. At last check, the Dow had lost 12.45 points or 0.04% to settle at 27,679.04.
The S&P 500 rose 3.38 points or 0.11% to 3,090.39. Materials stocks rose 0.61%, offsetting losses in real estate and financials.
The Nasdaq edged 12.49 points or 0.15% higher to trade at 8,476.85.
The gold price continued to decline, dipping 0.08% to $1,456 despite the hesitant mood in equities.
Investors are on edge ahead of President Trump’s speech before the Economic Club of New York, which is scheduled to begin at noon ET.
Wall Street will pore over his remarks for clues about the trade war, which will soon enter a third calendar year without even the slightest resolution.
Most analysts believe that the stock market has already priced in a phase one trade deal, even though that deal has no firm timeline. Not to mention the fact that no one even knows what the agreement includes.
Last week, hopes ranged high that Trump and Xi would sign an agreement that begins to unwind the series of retaliatory tariffs implemented since the trade war began in 2018. Trump quickly squashed reports that a tariff rollback agreement had already been reached.
On Monday, Trump adviser Peter Navarro took an even stronger stance. In addition to refuting rumors that the phase one deal would include a rollback on tariffs, he characterized import duties as an “insurance policy” to hold China accountable.
Navarro’s comments sent the S&P 500 and Nasdaq hurtling toward losses, though the Dow eked out a narrow gain on the back of a monster rally from its most heavily weighted component, Boeing.
Hopefully, Trump’s speech will allow Wall Street to gauge his temperature on the trade war to discern whether he’s open to removing tariffs – or if he remains committed to a hawkish trade policy heading into an election year.
Judging by his Twitter feed, Trump likely intends to use the speech as an opportunity to take a victory lap and tout his bona fides as a market-friendly president.
“Economy is BOOMING,” the president wrote this morning, adding that the stock market “[s]eems set to have yet another record day!”
Expect to hear Trump praise the economic impact of tax reform and detail just how high the Dow has climbed during his presidency. The question is whether Trump will stick to the script or veer off message.
Last modified: September 23, 2020 1:15 PM