Stocks wobbled on Wall Street in afternoon trading Tuesday as investors considered reports that the U.S. will delay a new round of tariffs on Chinese goods as the nations continue to negotiate a trade deal
Stocks wobbled on Wall Street in afternoon trading Tuesday as investors considered reports that the U.S. will delay a new round of tariffs on Chinese goods as the nations continue negotiating a trade deal.
The proposed tariffs scheduled to begin on Sunday threaten to hit U.S. consumers particularly hard by raising the prices of popular products including cellphones and laptops.
Both nations have been working toward a “phase 1” deal that Wall Street hopes can lead to an eventual long-term resolution.
Technology companies were the biggest gainers. Micron rose 1.9% and Nvidia climbed 1.5%. The sector is particularly sensitive to trade as many of the companies rely on China for sales and supply chains.
Energy and health care stocks also rose.
Several communications companies slipped. Comcast fell 2.1% and Netflix fell 1.9%.
KEEPING SCORE: The S&P 500 index rose less than 0.1% as of 1:17 p.m. Eastern time. The Dow Jones Industrial Average rose 2 points to 913. The Nasdaq rose 0.2%. The Russell 2000 index of smaller company stocks rose 0.1%.
European markets fell and Asian markets were mixed.
TRADE WOES: Wall Street has eagerly followed the trade talks between Washington and Beijing over since October. Negotiators have released few details, leaving investors to rely on statements from President Donald Trump and others on the status of a potential deal. Trump rattled the market last week when he said that a deal could possibly wait until after the 2020 elections. Media reports subsequently said that despite Trump’s rhetoric, the talks were making progress and China helped ease some of the tension when it said it would waive tariffs on American soybeans and pork, which have been hurting American farmers.
The longstanding trade war has impacted the U.S. economy. While a strong jobs market and robust consumer spending has driven the economy, which grew at 2.1% in the third quarter, the trade war contributed to a slowdown in manufacturing activity and in spending by corporations.
ANALYSTS’ TAKE: Wall Street has been reacting to whether the U.S. and China make a deal, but it won’t matter unless any deal is actually structured to last, said David Kelly, chief global strategist at JPMorgan Funds.
“The real issue is not the exact details or timing, but the durability,” he said. “Multiple changes of direction on trade over the last few years means nobody can trust that what we’re headed for here is a durable peace, rather it is a fragile cease-fire.”
LATE EARNINGS LIFT: Earnings season is essentially over but several smaller companies are getting a lift from late reports. Online clothing styling service Stitch Fix surged 8.5% and auto parts retailer AutoZone rose 7.1% after reporting surprisingly good results.