Stocks Reverse Gains as Trump Mulls New Trade Retaliation Against China – US Market Wrap

The S&P 500 briefly turned higher before closing slightly lower after Trump accused China of intentionally halting soybean purchases in an act he described as “economically hostile.” “We are considering terminating business with China involving cooking oil and other areas of trade as retribution,” the president said.

Trump’s comments came just hours after Beijing imposed sanctions on the US units of a major South Korean shipping conglomerate, deepening tensions tied to maritime dominance in the Asia-Pacific region.
Even as officials from both sides maintain that talks remain ongoing, investor unease is rising ahead of a potential summit between Trump and President Xi Jinping.

Earlier gains had been fueled by Federal Reserve Chair Jerome Powell, who reinforced expectations for an October interest-rate cut amid signs of a softening labor market. The two-year Treasury yield hovered near its lowest level since 2022. Powell also hinted that the Fed may halt its balance-sheet runoff in the coming months — a step aimed at maintaining liquidity in short-term funding markets.

Swap markets now imply about 125 basis points of Fed rate reductions by the end of next year, from the current 4% to 4.25% range.