[ad_1]
Stocks were off to a tepid start Tuesday after criminal charges against Huawei and one of its leading executives threatened to undermine U.S.-China trade negotiations. Positive earnings surprises helped to smooth out the volatility as investors kept an eye on the Federal Reserve’s policy meeting in Washington.
Dow Pares Gains as Stocks Move Mostly Lower
The Dow Jones Industrial Average managed to pare opening losses and even gained as much as 146 points through the morning session. However, the blue-chip index has since given up all its gains to trade virtually flat at 24,526.72. Dow futures had traded lower during the pre-market session.
The broader indexes pivoted lower during morning trade. The large-cap S&P 500 Index fell 0.3% to 2,635.85, with losses concentrated mainly in information technology, communication services, and consumer discretionary shares.
A poor performance in technology weighed on the Nasdaq Composite Index, which fell 0.6% to 7,044.25.
U.S. stocks declined sharply on Monday after Caterpillar Inc. (CAT) and Nvidia Corp (NVDA) issued weak earnings guidance on account of slowing China sales.
Huawei Criminal Charges
The Department of Justice on Monday filed criminal charges against Huawei and one of its leading executives, Meng Wanzhou, following a lengthy investigation into the Chinese technology giant. Huawei is being accused of trying to illegally obtain trade secrets from T-Mobile and incentivizing employees to steal confidential information from its competitors. The company is also being charged with circumnavigating sanctions against Iran through one of its subsidiaries.
The charges came at a critical juncture in U.S.-China trade negotiations and could serve as a point of contention for Beijing and Washington as they try to hammer out a new deal before a self-imposed deadline in early March. Progress on a free trade agreement has apparently stalled in recent weeks, with U.S. Commerce Secretary Wilbur Ross saying both sides remain “miles and miles apart” on a new pact.
Attention Shifts to Fed
Jerome Powell will hold a press conference following the FOMC rate decision on Wednesday. | Source: Shutterstock.
The Federal Open Market Committee (FOMC) began its two-day policy meeting in Washington on Tuesday against a backdrop of uncertainty over markets and interest rates. In a sudden turn, officials are now expected to keep rates on hold for the foreseeable future. The official rate statement on Wednesday may begin charting a steadier path for monetary policy in 2019 and beyond.
FOMC officials have been under fire for raising interest rates too quickly. President Trump says the Fed’s actions threaten his economic recovery, which shifted into high gear in 2018 following the biggest tax cut since the Reagan administration.
The official policy decision will be released at 2:00 p.m. ET Wednesday, followed by a press conference with Fed Chairman Jerome Powell.
Featured image courtesy of Shutterstock. Chart via TradingView.
[ad_2]
Source link