NEW YORK, N.Y. – Primary equity markets in the US weaken on Monday as market players await on more key risk events scheduled for this week.
Last trading week, major US equity markets surged, boosted by the optimistic US Non-Farm Payroll reports, but most of the market decided to book previous gains on Tuesday.
The benchmark S&P 500 index tracked a decline of 0.32%, going down by 9.95 points to settle at 3135.96. The technology-based Nasdaq Composite index also traded lower with a 0.40% decline, dropping 34.70 points to settle at 8621.83, while the blue-chip Dow Jones Industrial Average went down around 0.38% or 105.46 points towards 27909.60.
Most market sentiments are largely focused on the US-China trade deal. The prospect of sealing phase one of the trade deal between the two largest economies in the world remains the forefront in investor sentiments.
However, investors are getting more nervous with the Washington-imposed tariffs on Chinese goods looming over, although the rhetoric from officials between the two countries has been positive as of late.
On Monday, Ren Hongbin, Chinese Assistant Commerce Minister, said that China is hoping to seal the partial trade agreement with the US as soon as possible.
Outside market factors are also encouraging market players to take protection, which aided in the declines of US stocks.
In October and November, major US equity markets experienced solid rallies after another but started December sputtering some of its gains.
According to the managing director at KKM Financial, Dan Deming, while there is optimism in the market right now, it also comes with caution as there are a lot of factors for the market to contest with. He also stated that traders and investors are starting to load up on options in the Cboe Volatility Index ahead of the tariff deadline on Chinese imports on December 15.
Aside from the trade deal between the US and China and new tariffs on $160 billion worth of Chinese imports scheduled on December 15, market players are bracing for key risk events including updates on Washington politics, UK elections later in the week, which will determine the next move for Brexit, and the North American Free Trade Agreement deal.
The market awaits on the announcement from the House of Democrats regarding the two impeachment articles against President Trump, which was scheduled for Tuesday.
December 12 also marks the general elections in the UK, which would determine the future of the Brexit deal.
Finally, the Trump Administration and the House of Democrats are nearing to close a tentative agreement on upgrading the North American Free Trade Agreement following months of discussions.