Wall Street pulls back on tariff report

(Reuters) – U.S. stocks dipped on Tuesday, reversing earlier intraday record highs, following a report that the United States would likely maintain tariffs on Chinese goods until after November’s presidential election.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS/Brendan McDermid

The eventual removal of tariffs by Washington would depend on Beijing’s compliance with the Phase 1 trade accord, which is expected to be signed on Wednesday, Bloomberg reported, citing sources.

With the S&P 500 at record levels, equivalent to around 18 times expected earnings, algorithmic traders and human investors interpreted the Bloomberg report as a reason to sell, said Joe Saluzzi, co-manager of Themis Trading, in Chatham, New Jersey.

“We’re in a Jason Bourne market. The first thing Jason Bourne does when he walks into a room is look for the exit, just in case,” Saluzzi said, comparing investor sentiment to the fictional action character.

The Dow Jones Industrial Average, S&P 500 and Nasdaq each touched intraday record highs before losing ground in afternoon trade. The Dow ended the session with a modest gain.

Wall Street has surged in recent weeks, fueled by optimism that a truce in U.S. President Trump’s trade war with China would boost corporate earnings.

China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, and over $50 billion more in energy supplies, Reuters reported, citing a source briefed on the Phase 1 trade deal.

Kicking off the fourth-quarter earnings season, JPMorgan Chase & Co (JPM.N) rose 1.2% after reporting a better-than-expected profit on strength in its trading and underwriting businesses.

Wells Fargo & Co (WFC.N) tumbled 5.4% after reporting a slump in profit as it set aside $1.5 billion for

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