U.S. markets and stock exchange traded funds recovered early morning loses after Washington extended an allowance for companies to do business with telecom giant Huawei in a bid to ease tensions with the ongoing United States and China trade talks.
On Monday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 0.1%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 0.1%, and SPDR S&P 500 ETF (NYSEArca: SPY) was 0.1% higher as the S&P 500 was on pace to hit fresh record highs and the Nasdaq was also closing in on its all-time level.
The major benchmarks opened lower after a CNBC report of unrest in China due to President Donald Trump’s reluctance to roll back tariffs, Reuters reports.
Constructive Trade Talks
Investors, though, revealed some optimism after Chinese state media said the two countries held “constructive” trade talks, following a statement from White House economic adviser Larry Kudlow that revealed they were getting close to a deal.
“This (CNBC report) shows that progress doesn’t happen in a straight line and that is starting to frustrate people today. It feels very herky-jerky,” Scott Ladner, chief investment officer at Horizon Investments, told Reuters.
Talks between the world’s two largest economies have experienced bumps in recent weeks over China’s reluctance to commit to purchases of U.S. agricultural goods, the Wall Street Journal reports.
Related: U.S. Stock ETFs Rounding Out a Positive Week on Trade Deal Hopes
“The key to everything we’re seeing at the moment is the perception of uncertainty among investors,” Dan Kemp, chief investment officer for Morningstar Investment Management in Europe, the Middle East, and Africa, told the WSJ. “At the moment, we are living through a period where that uncertainty is very visible.”
Looking ahead, investors will be watching out for minutes from the Federal Reserve’s latest policy meeting, along with updated economic data on consumer confidence and the manufacturing sector.
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