U.S. stocks on Tuesday were poised to slip for a second session in a row as investors focused on Sino-American trade talks, with the latest developments making it unclear that a grand resolution can be achieved soon.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YMZ19, -0.61% fell 146 points, or 0.5%, to reach 26,296, those for the S&P 500 ESZ19, -0.57% fell 13.75 points, or 0.5%, to 2,923.75, while Nasdaq-100 futures retreated NQZ19, -0.56% 35.75 points to reach 7,704.25, a decline of 0.5%.
On Monday, the Dow DJIA, -0.36% fell 95.70 points, or 0.4%, to close at 26,478.02, while the S&P 500 index SPX, -0.45% gave up 13.22 points, or 0.5%, to end at 2,938.79. The Nasdaq Composite Index COMP, -0.33% lost 26.18 points, or 0.3%, to finish at 7,956.29.
What’s driving the stock market?
Wall Street’s focus on trade relationships between the U.S. and China have been heightened this week as discussions between lower-level officials, leading to higher-level delegates on Oct. 10-11, are kicking off.
However, recent developments this week have made it difficult for investors to anticipate that a sweeping tariff agreement between the world’s largest economies can be achieved soon, with a import duties set to be implemented on $250 billion worth of Chinese goods to 30% from 25% set to take effect Oct. 15.
Late Monday, the U.S. blacklisted 28 Chinese companies because of their alleged role in human-rights violations against Muslim minorities ahead of the high-level discussions which will be led by China Vice Premier Liu He on Thursday.
That said, Chinese commodity buyers have reportedly increased investments in U.S. soybeans, with the Wall Street Journal reporting that “farm exports, new purchasing deals and prices have all been climbing again in recent weeks.”
“It seems that investors are reluctant to assume a clear direction ahead of the high-level trade negotiations between US and Chinese officials on Thursday and Friday,” wrote Charalambos Pissouros, senior market analyst at brokerage JFD Group.
Looking ahead, investors will be watching data on producer prices, which could help guide economists’ and investors’ expectations for stubbornly low inflation that has mostly run below the Federal Reserve’s 2% annual target.
How are other markets trading?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -2.62% was 1.537% on Tuesday, up from 1.553% late Monday in New York.
West Texas Intermediate crude-oil for November delivery CLX19, -0.63% traded up 0.2% at $52.64 a barrel, early Tuesday.
In Asian trade, Hong Kong’s Hang Seng Index HSI, +0.28% rose 0.3% to 25,893.40, the China CSI 300 000300, +0.61% gained 0.6%, and Japan’s Nikkei 225 NIK, +0.99% rose 1%. The Stoxx Europe 600 SXXP, -0.89% declined 0.8%.