The stock market appeared to retreat on the heels of a disappointing United States consumer confidence report.
According to the Conference Board, the consumer confidence index fell to a reading of 84.8 this month from 91.7 in July. Economists had forecasted a reading of 93 for August. It marked the second consecutive drop as the U.S. economy continues to face an uphill recovery due to the COVID-19 health crisis.
As of 2:00 p.m. ET, the Dow Jones Industrial Average was down 0.44%, or 125 points. The S&P 500 and the Nasdaq Composite, which achieved another record intraday high today, were still in the green — albeit lower than this morning’s gains at a respective 0.11% rise, or nearly 4 points, and a 0.34% climb, or more than 38 points.
What We Reported (Aug. 25, 2020, 9:20 a.m. ET)
The stock market is ascending as investors applauded trade talks between top United States and Chinese officials following weeks of escalating tensions between the world’s two largest economies amid the coronavirus pandemic.
Contracts on the two major indices rallied on the news: Futures tied to the Dow Jones Industrial Average improved more than 0.5%, or 165 points, as of 9:00 a.m. ET. S&P 500 futures also grew nearly 0.4%, or 13 points, which suggested that the benchmark index will achieve a fresh record at the opening bell — a day after it logged its first-ever close at over 3,400 points. Nasdaq Composite futures remained flat, but the index also clinched a new high yesterday.
Late Monday, U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He participated in a videoconference where they expressed a renewed commitment to the phase-one trade deal that was inked early this year.
In mid-January, President Donald Trump and Chinese President Xi Jinping struck a truce, which included a commitment from China to increase its purchases of U.S. goods and services by $200 billion over the next two years, compared with the amount in 2017. However, China’s purchases of U.S. goods and services within the first three months of the year were below 2017’s levels by more than $7 billion. As a result, Trump has threatened multiple times that he could sever the agreement between the two countries if China failed to buy the amount of goods and services from the U.S. as promised.
Over the past four years, tariffs have been a significant focus for Trump, who has promised to resurrect U.S. manufacturing by slapping steep tariffs on foreign competitors, particularly China. Doubts over the future of trade between the two economies have surfaced over the past few months — particularly after the U.S. alleged that China had mishandled the coronavirus outbreak and contributed to a global economic fallout. COVID-19, which originated in the Chinese city of Wuhan, has now claimed at least 813,800 lives around the world and sickened more than 23.6 million people.
The stock market’s uptick was also driven by market watchers’ optimism surrounding a new emergency authorization for a coronavirus treatment by the U.S. Food and Drug Administration, as well as a report that the Trump administration was mulling a fast-track approval for an experimental vaccine from the United Kingdom.