U.S. Stocks Pull Back Sharply Going Into The Close

Stocks moved modestly higher over the course of the trading session on Wednesday but pulled back sharply going into the close. The volatility on the day came on the heels of the steep drop seen in the previous session.

The major averages ended the day mixed, as the Dow managed to hold on to a slim gain. While the Dow inched up 2.24 points or less than a tenth of a percent to 25,967.33, the Nasdaq fell 20.44 points or 0.3 percent to 7,943.32 and the S&P 500 dipped 4.63 points or 0.2 percent to 2,879.42.

The late-day pullback on Wall Street reflected uncertainty ahead of a crucial round of trade talks between the U.S. and China in the coming days.

The markets had earlier benefited from optimism about the talks after White House Press Secretary Sarah Sanders told reporters there are “indications” the Chinese would like to strike a deal, reiterating a claim President Donald Trump made on Twitter.

Trump noted Chinese Vice Premier Liu He will be a part of the talks, claiming the high-ranking official is “coming to the U.S. to make a deal.”

“We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!” Trump tweeted.

Trump also claimed China is attempting to pull back from previously negotiated terms of a trade deal in order to strike a new deal with a Democratic president that continues to rip off the U.S.

Meanwhile, China’s Commerce Ministry said the communist country will take “necessary countermeasures” if the U.S. follows through on a planned increase in tariffs on Chinese goods on Friday.

Sector News

Most of the major sectors ended the day showing only modest moves, although gold stocks showed a significant move to the downside, dragging the NYSE Arca Gold Bugs Index down by 1.8 percent.

The weakness in the gold sector came amid a decrease by the price of the precious metal, as gold for June delivery slid $4.20 to $1,281.40 an ounce.

Considerable weakness was also visible among utilities stocks, with the Dow Jones Utility Average falling by 1.2 percent to a two-month intraday low.

Tobacco, housing, and brokerage stocks also saw notable weakness on the day, while natural gas stocks moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index dropped by 1.5 percent, while Hong Kong’s Hang Seng Index slid by 1.2 percent.

Meanwhile, the major European markets moved higher over the course of the session. While the U.K.’s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index advanced by 0.7 percent.

In the bond market, treasuries moved to the downside on the day after initially showing a lack of direction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price rose by 3.4 basis points at 2.482 percent.

Looking Ahead

Any news out of the U.S.-China trade talks will attract attention on Thursday, although traders are also likely to keep an eye on reports on weekly jobless claims, the U.S. trade deficit, and producer prices.

Trading may also be impacted by reaction to earnings news from Disney (DIS), with the entertainment giant releasing its fiscal second quarter results after the close of today’s trading.

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