- Major US stock indexes were mixed on Tuesday amid trade tensions that have dimmed growth expectations, including for the chemical giant BASF.
- Negotiations to defuse the yearlong tariff dispute are set to resume, but the two sides remain far apart on key issues.
- The market is also expecting a less aggressive rate cut at the end of the month after a surprisingly robust June jobs report out last week.
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US stocks wavered Tuesday as Wall Street weighed ongoing trade tensions against expectations for the Federal Reserve to lower interest rates at the end of the month.
Technology stocks helped to partially offset losses, with the Nasdaq Composite ending higher after Cisco Systems said it agreed to buy Acacia Communications in a $2.6 billion deal.
Chemical companies dragged on the Dow Jones Industrial Average after the German giant BASF lowered its profit forecast, citing the ongoing trade war between Washington and Beijing.
Here's a look at the closing numbers:
- The S&P 500 rose 0.12% to 2979.63
- The Nasdaq Composite rose 0.54% to 8,141.73
- The Dow Jones Industrial Average declined 0.08% to 26783.49
US Trade Representative Lighthizer and Treasury Secretary Mnuchin talked trade with Vice Premier Liu He and Minister Zhong Shan on Tuesday, according to a US official. Negotiations to defuse the yearlong tariff dispute are set to continue, but the two sides remain far apart on key issues.
"The outcome of the US-China trade war remains very much up in the air," said Richard Koo, the chief economist at Nomura Research Institute. "If anything, conditions may have grown even more severe."
All eyes will be on Federal Reserve Chairman Jerome Powell on Wednesday as he testifies before Congress on Capitol Hill, with investors eager for signals of the interest rate path going forward.
Hopes for the central bank to aggressively lower its benchmark interest rate faded after the June jobs report came in stronger than expected last week. But most predict a quarter percentage point rate cut is still likely at the two-day meeting that ends July 31. On Wednesday, traders will also look to glean signals from the FOMC minutes out at 2 p.m. ET.
Within the S&P 500, these were the largest gainers:
- Advanced Micro Devices, Inc (+3.46%)
- Twitter (+3.26%)
- Western Digital Stock (+3.23%)
And the largest decliners:
- Garrett Motion (-5.40%)
- Davita Inc (-5.33%)
- L Brands (-4.17%)
Oil prices rose nearly 1% as tensions between Iran and the West continued after the Islamic Republic vowed to violate the 2015 nuclear deal. Traders are also adjusting supply expectations following an OPEC meeting last week, where the cartel agreed to cut coordinated output levels.