Stock Rally Halts on Lingering Trade War Risks – US Market Wrap

Stocks swung as Trump’s rapidly evolving tariff war with key trading partners showed no signs of abating, making investors wary of taking on too much risk following a two-day rally.

Even as Wall Street’s financial heavyweights reported an equity-trading boom and still-healthy consumers and businesses. After rising nearly 1%, the S&P 500 finished lower. Bonds rose after a Treasury official said a rule change was being considered that could reduce banks’ trading costs. The dollar reversed a five-day decline.

Trump urged China to contact him to begin negotiations, indicating that there is no end in sight to the trade war that has seen both sides raise tariffs. According to people familiar with the matter, the Asian nation has ordered airlines not to accept any more Boeing jet deliveries. Meanwhile, the European Union and the United States made little progress in resolving trade differences.

Global investors have been uneasy in recent weeks due to high uncertainty surrounding US trade policy and an increase in financial market volatility. Economic sentiment is at its lowest point in three decades, but fund managers’ pessimism is not fully reflected in their asset allocation, potentially leading to further losses for US stocks, according to a Bank of America survey.