U.S. stocks were lower early Tuesday morning as as worries over inflation tempered optimism over President Joe Biden’s remark early Monday he was considering reducing U.S. tariffs on Chinese imports.
Biden, who announced a new economic and trade initiative with the region while on a visit to Japan, confirmed to reporters he planned to discuss the issue of punitive tariffs imposed on China during former President Donald Trump’s administration with Treasury Secretary Janet Yellen once he returns to Washington.
“I’m talking with the secretary when I get home. We are considering it,” Biden said.
The comments raised optimism over the potential for an easing of tensions between the world’s two biggest economiesInvestors will be searching for clues about the impact that surging inflation is having on profit margins and consumer spending habits, especially after very disappointing results last week from Walmart and Target.
A busy morning is ahead for retail earnings, with Best Buy, AutoZone, Ralph Lauren, Abercrombie & Fitch and Petco posting ahead of the opening bell. In the afternoon the focus will turn to Nordstrom and Urban Outfitters.
Investors are also keeping an eye on the impact of the war in Ukraine on commodity prices and the possible blow to global economic growth from pandemic lockdowns in China.
Wall Street had an upbeat start to the week after seven weeks of declines that have nearly ended the bull market that began in March 2020. The S&P 500 rose 1.9% to 3,973.75, with technology and financial sector stocks doing much of the heavy lifting for the benchmark index. The Dow Jones Industrial Average rose 2% to 31,880.24 and the Nasdaq climbed 1.6% to 11,535.27.
Smaller company stocks staged a rally. The Russell 2000 gained 1.1% to 1,792.76.
Recent heavy selling has primed traders to snap up big tech stocks and shares in other companies that had been high-flyers before the market’s punishing skid, said Quincy Krosby, chief equity strategist for LPL Financial.
Wall Street will also get a few economic updates this week from the Commerce Department. On Thursday it will release a report on first-quarter gross domestic product and on Friday it will release data on personal income and spending for April.
Meanwhile, benchmarks fell in Japan, Australia, South Korea and China, although some of the indexes had been higher earlier in the day.
Japan’s benchmark Nikkei 225 declined 0.8% in afternoon trading to 26,793.94. Australia’s S&P/ASX 200 was little changed, inching down less than 0.1% to 7,144.30, after fluctuating throughout the day. South Korea’s Kospi sank 1.1% to 2,617.38. Hong Kong’s Hang Seng shed 1.7% to 20,125.87, while the Shanghai Composite declined 1.2% to 3,109.39.
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