US stocks were mixed on Monday and the S&P 500 approached an all-time high as trade talks between the US and China kicked off in London. The Dow fell 75 points. The broader S&P 500 was flat and the tech-heavy Nasdaq Composite gained 0.15%. Stocks were relatively unchanged as investors monitored developments from the trade talks. The S&P 500 on Friday hit its highest level since February and was less than 2.4% away from hitting a new record high. The Dow, S&P 500 and Nasdaq are coming off of back-to-back weeks of gains. The US stock market has steadily rallied in the last two months as President Donald Trump has softened his initial plan for sweeping tariffs. After the S&P 500 tumbled to the precipice of a bear market in early April, the index has rallied more than 20%. “Markets have moved higher on tariff postponement and the perception that they will be more moderate than initially announced,” said Richard Saperstein, chief investment officer at Treasury Partners. “We expect markets to remain headline sensitive, as trade deals take time to negotiate and unsettling tariff news is likely to cause noticeable volatility.” Wall Street last week rallied on optimistism about a potential thaw in trade tensions between the United States and China. The meeting on Monday between representatives from Washington and Beijing comes after Trump and Chinese President Xi Jinping spoke by phone on Thursday. The S&P 500’s ascent towards a record high comes after a year of wild swings. Wall Street this year has been shaken by historic levels of uncertainty and volatility as Trump has gone back and forth on tariffs. The S&P 500 slumped in March and early April as Trump rolled out his plan for massive tariffs, hitting its lowest level of the year on April 8. The market then steadily regained ground since as Trump softened his approach and paused most tariffs. Markets have also received a boost from relatively strong economic data that has soothed nerves about how the economy has been holding up during the early stages of Trump’s tariff regime. Investors this week will be attuned to new inflation data for the month of May. A rollercoaster The S&P 500’s record high of 6,144.15 was set on February 19. The benchmark index fell as low as 4,982.77 on April 8, about 18.9% below that high, before staging a remarkable recovery. Wall Street banks this year have have slashed and then raised their year-end projections for the S&P 500 as shifts in trade policy and surprisingly strong economic data have changed the outlook for markets. Goldman Sachs in May raised its year-end target for the S&P 500 to 6,100 after the bank had previously cut its target twice this year. UBS in May raised its target to 6,000 after similarly having cut it earlier in the year. Other banks have taken note, too. Deutsche Bank last week raised its year-end target to 6,550 after also having cut it earlier. JPMorgan Chase on Thursday raised its year-end target to 6,000 after a previous cut. The S&P 500 is trading just above 6,000 as of Monday. “The earnings outlook has been sensitive to policy decisions to an unprecedented degree, specifically on tariffs,” analysts at Deutsche Bank said in a June 2 note. “We now see the tariff drag at only about one-third of what we previously penciled in.” Sam Stovall, chief investment strategist at CFRA Research, said in a Monday note that if the S&P 500 eclipses a new record high, it will officially end the correction that the index entered on March 13, when it had just fallen 10% from its February high. A correction is a Wall Street term for falling 10% from a record high. Historically, the S&P 500 has risen an average of 10% over the next 127 days at the conclusion of a correction, according to Stovall. “Meaningful, extended gains are not assured, however,” he said. “Absent major policy surprises, the path of least resistance is to new highs,” analysts at JPMorgan Chase said in a Thursday note. This is a developing story and will be updated.
Stocks are mixed and S&P 500 hovers near record high as Washington and Beijing discuss trade
TruthLens AI Suggested Headline:
"U.S. Stocks Mixed as Trade Talks Between U.S. and China Commence in London"
CNN
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TruthLens AI Summary
On Monday, U.S. stock markets displayed mixed performances as the S&P 500 approached its all-time high amid ongoing trade discussions between the United States and China in London. The Dow Jones Industrial Average experienced a decline of 75 points, while the S&P 500 remained relatively flat and the tech-focused Nasdaq Composite saw a slight gain of 0.15%. Investors were closely monitoring the trade talks, which have become pivotal in shaping market sentiment. The S&P 500 had recently reached its highest level since February, sitting just 2.4% shy of a new record. The broader market has benefited from a sustained rally over the past two months, largely attributed to President Donald Trump's easing of his initial aggressive tariff plans. This shift in approach has led to a notable recovery for the S&P 500, which had previously faced a significant downturn, nearly entering bear market territory earlier this year. Richard Saperstein, the chief investment officer at Treasury Partners, remarked that the market's upward trajectory is linked to the postponement of tariffs and a more moderate outlook on trade policies. However, he cautioned that the market remains sensitive to headlines, indicating potential volatility ahead as trade negotiations continue.
The S&P 500's journey towards a record high has been marked by dramatic fluctuations, with the index once plummeting to 4,982.77 on April 8, approximately 18.9% below its peak of 6,144.15 set on February 19. Following this low, the market has rebounded significantly, buoyed not only by a shift in tariff policies but also by positive economic indicators that have alleviated concerns about the economy's resilience during the early stages of the tariff regime. As investors await new inflation data for May, Wall Street banks have adjusted their year-end projections for the S&P 500 multiple times in response to evolving trade dynamics and economic performance. Notably, Goldman Sachs and UBS have recently raised their targets for the index, reflecting a more optimistic outlook. Analysts suggest that surpassing the previous record high could signal the end of the correction the index faced in March, although they also warn that continued gains are not guaranteed and will depend on the stability of policy decisions moving forward.
TruthLens AI Analysis
The article presents an overview of the current state of the US stock market, particularly focusing on the mixed performance of stocks as trade talks between the US and China begin in London. It highlights the S&P 500's proximity to a record high while providing context about recent market fluctuations and investor sentiment.
Market Sentiment and Investor Reaction
The mixed performance of the stocks indicates a cautious approach among investors. The Dow's decline contrasted with the Nasdaq's slight gain suggests that market participants are selectively reacting to news. The mention of ongoing trade negotiations between the US and China implies that investors are keenly aware of geopolitical developments that can impact market stability. The article emphasizes how the postponement of tariffs has provided a boost to market confidence, illustrating the influence of political decisions on economic performance.
Historical Context of Market Fluctuations
The article references the significant decline of the S&P 500 earlier in the year due to Trump's initial tariff proposals, followed by a recovery as those plans softened. This context helps readers understand the volatility of the stock market and the impact of external factors, such as government policies and international relations, on investor behavior. The historical comparison also serves to highlight the unpredictable nature of the market, which is affected by both economic data and political rhetoric.
Implications for Future Market Movements
Given the ongoing negotiations and the potential for "unsettling tariff news," the article suggests that markets may remain volatile. This indicates that investors should prepare for fluctuations based on the outcomes of trade discussions. The insight from Richard Saperstein about market sensitivity to headlines further reinforces the notion that economic conditions are intertwined with political events.
Target Audience and Public Perception
The article likely aims to inform investors and the general public about the current state of the stock market while fostering a sense of cautious optimism. By focusing on the potential for a thaw in trade tensions, it may also appeal to those hoping for economic stability and growth. The language used is relatively neutral, avoiding alarmist tones, which could indicate an effort to maintain public confidence in the market.
Potential Manipulative Elements
While the article presents factual information, it could be argued that it selectively emphasizes positive news regarding the trade talks while downplaying risks associated with ongoing negotiations. The framing of the S&P 500 nearing a record high may serve to create a favorable perception of the market, potentially influencing investor behavior.
Overall Reliability
The news presented in the article appears to be grounded in recent market data and expert commentary, making it relatively reliable. However, the emphasis on positive developments in trade talks might lead to an overly optimistic view that does not fully account for potential risks.
In conclusion, the article serves to inform readers about the stock market's current state while subtly encouraging a more optimistic outlook amidst ongoing uncertainties.