Dow loses steam and finishes lower despite trade optimism
The Dow closed virtually flat on Wednesday, shrugging off the optimism about a US-China trade deal that propelled stocks higher earlier in the day.
The Dow finished in negative territory, down 12 points. The S<><>&P 500 also gave back its gains and closed 0.1% lower. The Nasdaq Composite was the outlier and closed 0.3% higher./ppWith only three trading days left in June, the Dow, SP and Nasdaq are on track for their best month since January. The Dow climbed 2.4% so far in the second quarter, while the S<><><><><><><><><><><><><><><><><><><><><><><><><>P and the Nasdaq are up 2.8% and 2.3%./ppStocks spent much of Wednesday in the green. The upswing followed a weaker market performance on Tuesday, though it proved to only be temporary. Comments made by Treasury Secretary Steven Mnuchin, who said a trade deal with China was close to done, gave the market a boost earlier./pp”We were about 90% of the way there and I think there’s a path to complete this,” Mnuchin said a href=”https://www.cnbc.com/2019/06/26/mnuchin-says-us-china-trade-deal-was-90-percent-complete.html” target=”_blank”in an interview with CNBC/a./ppPresident Donald Trump is set to meet China’s President Xi Jinping on the sidelines of the G20 summit in Japan this week to talk trade./ppOn top of that, the US could suspend further tariffs on Chinese imports as negotiations resume, according to a a href=”https://www.bloomberg.com/news/articles/2019-06-25/u-s-set-to-delay-more-china-tariffs-as-talks-expected-to-resume” target=”_blank”Bloomberg report/a./pp”Resuming trade talks seems to be the best attainable result of the Trump-Xi meeting at the G20 summit. But even then, there are too many bridges to be crossed for a smooth path towards a deal,” cautioned Raoul Leering, head of international trade analysis at ING./ppThe United States knows that China won’t strike a deal at any price, Leering added. The breakdown of talks in May also changed expectations for the market, and resuming talks may not be enough to keep sentiment going for long./ppLeering expects a deal to be agreed in the fourth quarter./ppJust like stocks, oil prices are also being supported by optimism for the G20 summit, as well as the hopes that OPEC will extend production cuts. Adding to the bullish sentiment, US crude inventories fell by 12.8 million barrels last week, according to a report released Wednesday by the a href=”http://ir.eia.gov/wpsr/wpsrsummary.pdf” target=”_blank”Energy Information Administration/a. US oil prices settled 2.7% higher at $59.38 a barrel, according to CME./ppElsewhere, gold prices, which recently rose to a six-year high, are taking a breather. The tensions between the United States and Iran also seem to be cooling off — or, at least, are not escalating. Gold is a safe haven investment and tends to rise in value during times of uncertainty. Gold prices settled 0.2% lower at $1,411.60 an ounce, according to CME./p