U.S. stocks opened lower Wednesday as investors await congressional testimony by Federal Reserve Chairman Jerome Powell and gauged prospects for a U.S.-China trade deal a day after President Donald Trump offered no hints on the timing of an eagerly anticipated “phase one” pact.
How are major indexes trading?
The Dow Jones Industrial Average DJIA, -0.20% opened 86 points, 0.3%, lower, at 27,605. The S&P 500 fell more than 8 points at the open, 0.3%, at 3,083. The Nasdaq was off 31 points, or 0.4%, to 8,455.
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Bulls and bears fought to a standstill Tuesday as far as the Dow DJIA, -0.20% was concerned, with the blue-chip gauge ending unchanged at 27,691.49. The S&P 500 SPX, -0.26% rose 4.83 points, or 0.2%, to end at 3,091.84, while the Nasdaq Composite COMP, -0.29% rose 21.81 points to end at 8,486.09, up 0.3%. The finish marked a record close for the Nasdaq, while the Dow and S&P 500 remain near their highs.
What’s driving the market?
In a Wednesday speech at the Economic Club of New York, Trump said a “significant phase one” deal could happen soon, but only if the deal worked to the advantage of U.S. workers and businesses. News reports also indicated Trump might put off a decision, due Wednesday, on whether to impose tariffs up to 25% on European auto imports.
The Wall Street Journal late Wednesday reported that tariffs were emerging as the main stumbling block to efforts by the U.S. and China to reach a limited trade deal. Specifically, the hurdle surrounds whether the U.S. has agreed to remove existing tariffs as part of a partial phase one deal or whether the U.S. would only cancel tariffs that are set to take effect on Dec. 15, the report said.
“Investors still seem to think this is mostly theatrics judging by the muted market reaction so far, but there’s no denying that even a partial deal is no longer ‘a sure thing,’” said Marios Hadjikyriacos, investment analyst at XM, in a note.
“Overall, the calm in the trade war and the broader risk-on sentiment of recent weeks may be more fragile than they appear, and with markets having gone on a euphoria rally lately, it might not take much bad news to trigger a notable correction,” he said.
Powell is set to testify before lawmakers twice this week, with his first appearance coming at 11 a.m. Eastern before the Joint Economic Committee. Analysts expect few fireworks from Powell.
“We expect him to reiterate that monetary policy is ‘in a good place,’ hence suggesting that the Fed is on hold for now,” wrote analysts at UniCredit, in a note.
Meanwhile, investors may also pay attention to House impeachment hearings set to get under way at 10 a.m. Eastern.
Inflation was a bit higher than expected in October, the Labor Department said Wednesday morning. The consumer price index was up 0.4% during the month, a bit higher than the MarketWatch consensus forecast of 0.3% rise. Americans paid higher prices for gasoline, medical treatment and recreation in October, but overall, inflation remained low and stable. For the year the cost of living rose 1.8%.
Stocks to Watch
Earnings reports are expected Wednesday from tech heavyweight Cisco CSCO, +0.51%.
Shares of Canada Goose GOOS, -4.91% surged as trading began after beating earnings. Luckin Coffee LK, +13.16% shares were up by double-digits after reporting higher-than-expected revenue despite a wider loss.
Nike NKE, +1.07% will stop selling sneakers and apparel directly on Amazon.com Inc., AMZN, -0.41% the sportswear giant said.
Shares of Mosaic Co. MOS, -3.77% slid after an analyst downgrade.
Google’s GOOGL, -0.15% will soon offer checking accounts to consumers, becoming the latest Silicon Valley heavyweight to push into finance while drawing scrutiny from federal regulators for collecting health data without consent, the Wall Street Journal reported.
What are other markets doing?
December gold GCZ19, +0.56% rose $9, or 0.6%, to $1,463. The ICE U.S. dollar index DXY, +0.07% ticked up fractionally against a basket of currencies.
West Texas Intermediate crude for December delivery CLZ19, -0.04% , was down 0.%, or 30 cents, to $56.49 a barrel on the New York Mercantile Exchange.
The 10-year U.S. Treasury note TMUBMUSD10Y, -2.58% slipped 5 basis points to 1.87%.
In Asia overnight, the China CSI 000300, -0.09% slipped and Hong Kong’s Hang Seng Index HSI, -1.82% 1.8%, while Japan’s Nikkei 225 Index NIK, -0.85% slipped 0.9%.
In Europe, the Stoxx Europe 600 SXXP, -0.43% fell 0.4%.
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