U.S. stocks wobbled between small gains and losses in early trading on Thursday as investors turned more cautious as talks between the U.S. and China on a trade deal appear to hit some snags.
China is pressing Washington to roll back tariffs as part of potential deal that the nations are currently negotiating. U.S. President Donald Trump has so far been dismissive about any change on tariffs while negotiations continue. The latest potential hurdle comes a day after reports said that China is being reluctant to commit to a specific amount of U.S. farm good purchases.
Investors hope that both nations can come to some sort of an agreement to avert new and potentially more damaging tariffs that are scheduled to take effect next month. Those new tariffs would hit some popular consumer products, such as electronic devices, as well as everyday goods.
Technology stocks were the biggest losers in the early going. Cisco fell 7% after giving investors a surprisingly weak revenue forecast.
Banks also moved broadly lower. The yield on the 10-year Treasury fell to 1.82% from 1.87% late Wednesday. Lower bond yields hurt banks’ ability to charge more lucrative interest rates on mortgages and other loans.
Retailers and other companies that focus on consumer goods and services held up better than the rest of the market. Walmart rose after raising its profit forecast following a solid earnings report.
Real estate companies and utilities also held up well as investors shifted money into more defensive holdings.
Investors will be closely listening for any significant comments from Federal Reserve Chairman Jerome Powell when he makes another appearance before Congress Thursday. He is expected to reiterate that the Fed will leave rates unchanged in the coming months, unless the economy shows signs of worsening.
KEEPING SCORE: The S&P 500 index rose less than 0.1% as of 10:05 a.m. Eastern time. The Dow Jones Industrial Average rose 5 points to 27,789. The Nasdaq fell 0.1%. The Russell 2000 index of smaller company stocks rose 0.1%.
MARKET OVERVIEW: Stocks are still trading near records. Both the S&P 500 and Dow Jones Industrial Average reached new highs on Wednesday.
The broader market has been gaining ground for weeks on hopes that the U.S. and China can make progress in their latest push for a deal. Investors have also been encouraged by surprisingly good corporate earnings and data showing the economy is still growing solidly.
OVERSEAS: European markets moved lower. Asian markets were mixed. China’s government reported Thursday that factory activity and spending weakened more than expected in October. Japanese data showed economic growth also slowed.
BIG BOX GROWTH: Walmart rose 2% after raising its annual profit forecast following a strong third-quarter earnings report. The world’s largest retailer said a key measure for sales rose solidly and it saw a surge in online grocery sales. The encouraging results and forecast were welcomed by investors who are closely watching the company as it heads into the busy holiday shopping season amid intense competition with online retail giant Amazon.