The stock market is on edge as trade tensions between the U.S. and China reach a boiling point. A volatile session on Tuesday left investors uncertain about the future, with stock futures barely budging.
Traders on the New York Stock Exchange floor were busy digesting the latest developments, which included a potential cooking oil embargo by President Trump against China. This move, in retaliation for China's refusal to buy U.S. soybeans, sent shockwaves through the market.
The S&P 500 attempted a comeback but ultimately closed 0.2% down, while the Nasdaq Composite fell 0.8% and the Dow Jones Industrial Average rose 0.4%. It was a tumultuous day, with indexes swinging wildly.
But here's where it gets controversial: Trump's threats and China's sanctions are escalating the trade war. U.S. Trade Representative Jamieson Greer warned that Trump's tariffs could go into effect as early as November 1st, depending on China's next move. Greer emphasized that "a lot depends on what the Chinese do."
And this is the part most people miss: the impact of the government shutdown. Wall Street veteran Art Hogan believes that the uncertainty surrounding the trade war and the shutdown will keep stocks trading sideways near all-time highs. He adds that the shutdown is damaging the economy and affecting corporate confidence, which could impact earnings guidance.
Agriculture stocks, however, rose on the news of the potential cooking oil embargo. Shares of Bunge Global and Archer-Daniels-Midland, major soybean processors, saw a boost of nearly 2%.
As of 6 p.m. ET on Tuesday, stock futures were trading near flat. Dow futures slipped just under 0.1%, while S&P 500 and Nasdaq 100 futures remained largely unchanged.
With no major economic releases scheduled for Wednesday, all eyes will be on corporate earnings from major U.S. banks. But will these earnings reports provide the tailwind the market needs, or will the trade war and shutdown continue to weigh on investor sentiment?
What do you think? Will the market recover, or are we headed for a prolonged period of uncertainty? Share your thoughts in the comments!
