U.S. stock-market indexes were trading marginally lower on Tuesday amid uncertainty surrounding a meeting later this week between President Donald Trump and his Chinese counterpart.
Some analysts said investors are reluctant to make big bets ahead of Friday’s jobs report as well as the outcome of the confab on Thursday and Friday between Trump and Chinese President Xi Jinping.
The S&P 500 index SPX, -0.19% was off by 6 points, or 0.2%, at 2,353, with ten of its 11 main sectors trading lower. Energy and financials and energy shares were leading losses, down at least 0.4%.
The Dow Jones Industrial Average DJIA, +0.03% was trading flat at 20,659, with shares of Caterpillar Inc. CAT, +2.07% up 2.2%, contributing all of the blue-chip gauge’s early advance after an upbeat research note from Goldman Sachs.
The Nasdaq Composite Index COMP, -0.14% shed 7 points, or 0.1%, to 5,887.
The three equity benchmarks are on track to log their third straight day of declines, such a series of stumbles would be the tech-heavy Nasdaq’s longest losing stretch since the three-day slide ended Dec. 30, according to FactSet data. The declines highlight a tapering of upbeat trade sparked by the election of President Trump, who promised during his campaign a basket of market-friendly policies. But skepticism about his ability to implement those policies, combined with lofty equity valuations, have led to a recent downdraft, market participants said.
Still, bullish market analysts argue that the equity slump hasn’t been particularly severe, with optimists eager to pick up shares that have fallen in price.
“The price action in the stock market suggests there is still a ‘buy the dip’ mentality,” said Mark Kepner, managing director of sales and trading at Themis Trading. “When stocks sold off on Monday after disappointing car sales number, buyers came in the afternoon,” he said.
Looking ahead, investors are eagerly awaiting coming quarterly results and a report on employment due Friday for confirmation that the markets monthslong rally is supported by earnings and economic improvement.
“If [first-quarter] earnings pick up and/or the Fed passes on a June hike, the president and Congress may have more time to work on tax reform without roiling markets. That, after all, is what equity investors really want to see. But with equity valuations high and volatility low, time isn’t necessarily our friend as we kick off the second quarter,” wrote Nicholas Colas, chief market strategist at Convergex, a New York-based global brokerage company, in a note.
The market is pricing in a more than 60% chance of a rate hike at the Federal Reserve’s June meeting, compared with a 6% chance of a rate increase at its confab in May, according to FedWatch tool.
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Economic news and Fed speakers: The U.S. trade deficit sank almost 10% to $43.6 billion in February, aided by an increase in exports to a 26-month high and a plunge in imports of automobiles and cellphones.
Separately, factory orders rose 1% in February, in line with expectations.
Fed Gov. Daniel Tarullo is scheduled to give “departing thoughts” as he leaves the central bank, speaking at Princeton University in New Jersey at 4:30 p.m. Eastern.
Other key economic releases this week are Wednesday’s Fed minutes and Friday’s jobs report.
And check out: MarketWatch’s Economic Calendar
Stock movers: Shares of Staples Inc. SPLS, +11.55% soared 12% to a 3 1/2-month high after The Wall Street Journal reported that the office supply retailer was exploring a possible sale of the company.
Shares in Nvidia Corp. NVDA, -6.27% dropped 4.5%, after Pacific Crest analysts turned bearish, citing concerns that the maker of graphics chips may have already captured so much of the available market that growth could become a problem.
Shares of other retailer, however were sharply down. Kohl’s Corp KSS, -3.86% and Ralph Lauren Corp RL, -3.88% fell nearly 4%. L Brands, Inc LB, -3.41% and Michael Kors Holding Ltd. KORS, -2.89% were down more than 3%.
J.P. Morgan Chase & Co.’s stock JPM, +0.21% shares were slightly lower, as CEO James Dimon is due to appear in a Yahoo Finance town-hall event at 2 p.m. Eastern Time after the release of his annual letter to shareholders.
Acuity Brands Inc. AYI, -13.75% which makes lighting products, dropped 15% after posing earnings results.
Other markets: Gold futures GCJ7, +0.36% and other haven assets advanced, while oil futures CLK7, +0.78% traded higher. Asian equities pulled back, as analysts said there is growing investor uncertainty about U.S.-China trade. European markets SXXP, +0.15% were lower, and a key dollar index DXY, +0.11% was slightly higher. The yield on the 10-year Treasury note TMUBMUSD10Y, +0.77% was unchanged at 2.32%.