Bloomberg News
U.S. stocks were struggling to hold on to opening gains on Tuesday, as investors remained cautious about trade tensions between the U.S. and China despite recent signs of easing on both sides.
What are markets doing?
The S&P 500 rose 2 points, or 0.3%, to 2,736 with seven of its 11 main sectors trading higher. Utilities, financials, telecoms and consumer staples shares were leading the gains, suggesting somewhat defensive posture on Wall Street.
The Nasdaq Composite Index pared earlier gains to trade flat to 7,395.
The Dow Jones Industrial Average retreated, to trade 41%, or 0.2%, lower at 24,968.
The small-cap benchmark Russell 2000 index was flat at 1,636 after scoring its latest in a series of records on Monday.
What’s driving the market?
The Chinese government said Tuesday that it will cut import duties on passenger cars as of July 1 to 15% from the current 25%. Ford Motor Co. rose 1% in premarket. And the U.S. and China are also reportedly nearing a deal to settle a controversy over Chinese telecom group ZTE Corp.
Laying out new demands for Iran on Monday, the White House said any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East. The demands were met by immediate rejection from Iran.
Meanwhile, rising oil prices may stay on investors’ minds, amid worries about the effect they could have on inflation and stock prices. Analysts say global oil prices will remain elevated as long as the market thinks sanctions could be imposed on Venezuela and Iran.
Economic preview: Rising rates, higher gas have failed to kill the economic expansion
What are strategists saying?
“We are far from being out of the woods when it comes to trade negotiations with China, but hopeful that we are moving in the right directions and markets are optimistic about the progress,” said Lindsey Bell, investment strategist at CFRA.
However, Bell warned that any number of current geopolitical concerns could bring back volatility.
“The next six months may be rocky, especially given we are in an election year as well, when second- and third-quarter returns are weaker. Volatility could return significantly,” Bell said.
What stocks are in focus?
Toll Brothers Inc. shares slumped 8.2% after the building company posted a 10% fall in second-quarter profit on higher impairment charges, and said gross margin fell.
Kohl’s Corp. gave up premarket gains that were fueled by better-than-expected earnings and upbeat outlook, and turned negative to trade 2.3% lower.
Shares of Micron Technology Inc. rallied 7% after the company raised its third-quarter outlook. On Tuesday a number of analysts upgraded their ratings on the stock.
AutoZone Inc. shares rose 4.4% after the company blew past profit estimates for the first quarter.
TJX Companies Inc. shares rose 1.2% after the retailer’s quarterly earnings came above estimates.
Hewlett Packard Enterprises Co. Intuit Inc. and Red Robin Gourmet Burgers, Inc. will report after the close.
Sony Corp. shares fell 1.4% after the Japanese multinational conglomerate said it has agreed to buy Mubadala Investment Co.’s stake in EMI Music Publishing, in a roughly $2.3 billion deal.
What are other markets doing?
Asian markets finished mixed, while European stocks were inching higher.
Gold futures inched up 0.3% to $1,294.10 an ounce. The ICE U.S. Dollar Index fell 0.2% to 93.506, as the pound strengthened against the buck
Bank of England policy maker Gertjan Vlieghe reportedly predicted up to two interest-rate increases a year, as officials testified in front of the U.K. Treasury committee.
U.S. oil futures rose 0.3% to $72.60 a barrel, lifted by growing concerns over global supply given worries Venezuela and Iran could come under new sanctions by the U.S.