U.S. stocks fluctuated as investors mulled the implications of the partial trade deal reached last week between the U.S. and China. Oil retreated and the dollar strengthened.
The S&P 500 Index opened in the red after China appeared to pour cold water on a pact touted by President Donald Trump, with people familiar with the situation saying it wanted to iron out details before signing it. A tweet from the Global Times’ editor-in-chief painted a more optimistic outlook, giving equities some support. U.S. debt markets are closed for the Columbus Day holiday.
“I think given we’ve had a bit of good news, chances are we’re going to be on the doubting side this week,” said Peter Jankovskis, Oakbrook Investments LLC’s co-chief investment officer. “That’s been the natural ebb and flow of the whole process.”
The Stoxx Europe 600 Index closed lower, while Asia stocks climbed, helping sustain a rally in emerging-market assets after the positive conclusion of the latest round of trade talks.
“I expect there will be a deal,” Treasury Secretary Steven Mnuchin said Monday on CNBC television. The sides made “substantial progress” last week in negotiations and Mnuchin said he expects Trump and President Xi Jinping to finalize the accord at a summit in Chile next month.
The pound extended its drop, after rocketing for the past two sessions, as European Union negotiators warned that Brexit plans from U.K. Prime Minister Boris Johnson are not yet good enough to be the basis for an agreement. Turkey’s stock market tumbled and its currency weakened as the U.S. and Europe threatened to impose sanctions over the incursion into Syria.
Elsewhere, West Texas crude oil dropped after surging the most in almost a month on Friday.
Focus will soon turn to earnings season that begins with big U.S. banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley.