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U.S. stock benchmarks on Monday looked set to head lower for a second day in a row as a lack of fresh progress in China trade talks ahead of Sunday’s tariff deadline unsettled investors, with the latest Federal Reserve policy meeting set to get under way.
How are major benchmarks performing?
Futures for the Dow Jones Industrial Average YMZ19, -0.42% were down 101 points, or 0.4%, at 27,801, those for the S&P 500 index ESZ19, -0.37% were off 9.75 points, or 0.3%, at 3,124.75, while Nasdaq-100 futures NQZ19, -0.46% retreated 33.75 points, or 0.4%, at 8,322.50.
On Monday, the Dow DJIA, -0.38% retreated 105.46 points, or 0.4%, at 27,909.60, while the S&P 500 index SPX, -0.32% lost 9.95 points, or 0.3%, at 3,135.96 and the Nasdaq Composite Index COMP, -0.40% shed 34.70 points, or 0.4%, at 8,621.83.
All three benchmarks on Monday snapped a three-day win streak.
What’s driving the market?
Citing sources familiar, The Wall Street Journal reported that U.S. lawmakers are working on a new bill that would bar the use of federal funds to buy Chinese buses and railcars, a move that would likely complicate efforts to strike a partial tariff agreement between President Donald Trump’s administration and Beijing ahead of a looming Dec. 15 deadline for 15% import duties on $156 billion of annual consumer imports.
Sources close to the talks told the South China Morning Post that “it is growing increasingly unlikely that a US-China trade deal will be completed this week,” though the same officials said that they expect the Dec. 15 tariffs to at least be delayed to give more time to work out a deal.
Against that backdrop, investors appeared reluctant to buy assets considered risky like stocks, with tariff worries looming.
Meanwhile, the Federal Reserve is set to commence its two-day policy meeting where it is expected to hold steady on interest rates following a stellar November jobs report, but investors will be eager to glean details on the outlook for monetary policy. The WSJ reported that Fed Chairman Jerome Powell’s main assignment will be to forge consensus toward a “broader revamp of the Fed’s rate-setting strategy” as he encourages the central bank to let inflation run above its annual 2% target.
Meanwhile, a report on small-business owners’ confidence in the U.S. economy rose in November, its largest month-over-month gain since May 2018, as owners continued to invest, hire and increase wages, according to the National Federation of Independent Business.
Looking ahead, a reading of productivity and costs — a measure of the costs and efficiency of U.S. providing goods and services — is due to be released at 8:30 a.m. Eastern Time.
Which stocks are in focus?
Stitch Fix Inc. SFIX, +3.86% rose premarket Monday after the online personal-styling service reported first-quarter results that exceeded analysts’ estimates.
AutoZone Inc. shares AZO, -0.31% rose in premarket trade Tuesday, after the car parts retailer beat estimates for its fiscal first quarter.
Designer Brands Inc. DBI, +2.22% shares fell before the opening bell Tuesday as the accessories retailer reported third-quarter profit that missed expectations and cut its guidance.
Chewy Inc. CHWY, -3.09% shares were lower in premarket action on Tuesday even after the online pet supply retailer late-Monday posted better-than-expected results for the quarter.
How are other markets faring?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.71% fell 2.6 basis points lower to 1.803% early Tuesday.
West Texas Intermediate crude for January delivery CLF22, +1.20% on the New York Mercantile Exchange fell 31 cents, or 0.5%, to $58.71 a barrel, as trade-war concerns persisted.
February gold GCG20, +0.40% on Comex added $6.90, or 0.5%, to reach $1,471.90, ahead of the Federal Reserve’s central bank meeting and after lackluster trade on Monday, where the metal finished little changed.
The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, -0.08%, declined 0.1% at 97.523, against a basket of a half-dozen currency peers.
In Europe, the Stoxx 600 Europe index SXXP, -0.91% traded 1% lower at 402.27.
In Asia overnight Friday, the Hang Seng HSI, -0.22% closed off 0.2%, the China CSI 300 000300, +0.13% inched up 0.1%, while the Shanghai Composite Index SHCOMP, +0.10% gained about 0.1%, following a similar gain on Monday. Japan’s Nikkei 225 NIK, -0.09% retreated 0.1%.
