Stocks dip, retreating from record highs hit after EU trade deal
U.S. President Donald Trump and European Commission President Ursula von der Leyen unveiled a trade framework on Sunday, slashing EU import tariffs to 15% - half the previously threatened rate that was scheduled to take effect on August 1. Still, France denounced the deal as a "submission."
The deal is the latest in a string of announcements in recent days on trade agreements with countries such as Japan and Indonesia. Top U.S. and Chinese economic officials resumed talks in Stockholm to resolve longstanding economic disputes at the crux of a trade war between the world's two largest economies.
"It's feel-good in the sense that it doesn't represent Armageddon, if the draconian tariffs went into place," said Scott Welch, chief investment officer at Certuity in Potomac, Maryland.
"But it's much too soon to pass judgment on the long-term effects on how that will play out. It's better than the alternative for sure, and so I hope they continue."
The Dow Jones Industrial Average (.DJI), opens new tab fell 128.16 points, or 0.29%, to 44,773.76, the S&P 500 (.SPX), opens new tab lost 8.59 points, or 0.14%, to 6,380.05 and the Nasdaq Composite (.IXIC), opens new tab gained 33.74 points, or 0.16%, to 21,141.93.
While the moves on Wall Street were modest, the S&P 500 and Nasdaq both managed to climb to intraday records.
Aside from the trade announcement, investors were awaiting a policy announcement from the Federal Reserve on Wednesday. The central bank is widely expected to keep U.S. rates unchanged even as the White House has ramped up pressure on Fed Chair Jerome Powell to lower borrowing costs.
Also on deck this week were a slew of corporate earnings, including results from heavyweights Meta (META.O), opens new tab, Microsoft (MSFT.O), opens new tab, Amazon (AMZN.O), opens new tab and Apple (AAPL.O), opens new tab, which could sway broader investor sentiment in either direction.
Along with the Fed meeting and earnings, a number of economic indicators are scheduled to be released this week, including the Personal Consumption Expenditure report (PCE) - the Fed's preferred inflation measure - and the government payrolls report to gauge how tariffs may have affected consumer prices and the labor market.
Nike (NKE.N), opens new tab climbed 3.8% after J.P. Morgan upgraded the stock to "overweight" from "neutral" and said investors should "just buy it".
Declining issues outnumbered advancers by a 1.94-to-1 ratio on the NYSE, and by a 1.47-to-1 ratio on the Nasdaq.
The S&P 500 posted 26 new 52-week highs and three new lows, while the Nasdaq Composite recorded 62 new highs and 45 new lows.
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From ingredient costs to sagging demand, tariffs further pinch company earnings
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