Stocks slipped on Tuesday as investors weighed ongoing trade negotiations between China and the U.S. along with strong earnings from Target.
The Dow Jones Industrial Average fell 15 points as shares of Walgreens Boots Alliance dipped more than 1 percent. The S&P 500 were down 0.1 percent along with the Nasdaq Composite.
Secretary of State Mike Pompeo said Monday he thought the two countries were “on the cusp” of reaching a deal that would end the trade skirmish.
“We’re trying to get that rectified, get that fixed, make it fair and reciprocal and I think we’re on the cusp of doing that and I hope all those tariffs will go away, all those barriers,” Pompeo told KCCI television in Des Moines, where he was attending a farmers conference.
Pompeo’s comments come after sources told CNBC that U.S.-China trade negotiations are in the “final stages” and that a summit in Mar-a-Lago later this month could close the deal.
U.S. investors have been closely watching negotiations on trade with China as they assess how a deal —or lack thereof — could impact corporate profits.
However, equities fell on Monday amid worries that a deal was fully priced into the market. The decline pushed the S&P 500 back below the key 2,800 level.
“The rally from the 12/26/18 low is among the strongest starts to the year since 1987. The past two months’ straight-line move, however, has seen bearish sentiment fall to its lowest since January 2018, just as the S&P 500 finds resistance at 2,813,” Julian Emanuel, chief equity and derivative strategist at BTIG, wrote in a note. “Monday’s reaction to this overhead level suggests that stocks will likely spend time ‘Reading Between the Lines’ of resistance (2,813) and support (2,750 and 2,600) before heading to BTIG’s year-end price target of 3,000.”
On Tuesday, investors cheered stronger-than-expected quarterly results out of retailer Target, sending its shares up around 4 percent. The company posted earnings per share of $1.53 and revenue of $22.977 billion. Both numbers topped analyst estimates from Refinitiv.
Target’s same-store sales, a key metric watched by Wall Street, rose 5.1 percent. The company also said its digital sales grew by more than 25 percent.
On the economic front, there will be services PMIs at 9.45 a.m. ET; new home sales at 10 a.m. ET and federal budget figures released at 2 p.m. ET.
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