U.S. markets and stock ETFs slipped toward the end of Thursday, a day after the Federal Reserve cut interest rates and left investors wondering about the future monetary policy outlook.
On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 0.2%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) fell 0.2% and SPDR S&P 500 ETF (NYSEArca: SPY) was flat.
Investors continued to comb over the Fed’s latest outlook on interest rate cuts while waiting for further developments in trade talks between the U.S. and China as representatives were scheduled to meet on Thursday, the Wall Street Journal reports.
“There has been slightly more constructiveness lately, but if there is any sort of agreement, it will be a very light, mini-deal, because the U.S. and China are still very far apart on the main issues,” Ben Phillips, Chief Investment Officer at EventShares, told Reuters.
Many hoped that central banks will continue to support economic growth ahead as investors try to position themselves in an uncertain environment with lingering uncertainty over trade, a slowdown in U.S. manufacturing and sanctions against Iran that triggered volatility in the Middle East.
“The overall picture for the economy looks good,” Jeff Kravetz, regional investment director at U.S. Bank, told the WSJ. “We have contained inflation, low unemployment and a resilient consumer. The economic outlook is still favorable with interest rates low, but we still have some caution with the geopolitical risks.”
The technology sector helped prop up muted trading on Thursday after Microsoft (NasdaqGS: MSFT) shares jumped in response to plans to increase stock repurchases and raise dividends 11%. Some showed continued bullishness on the tech sector despite trade headwinds.
“Semiconductor stocks have more risk because they’re exposed to China, but if we’re going to forecast a positive trade outcome in the next few months, I think that’s an area that will surge,” Ben Barzideh, wealth adviser at Piershale Financial Group, told the WSJ.
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