(Reuters) – The S&P 500 was trading flat but was off session lows on Friday as investors tracked trade headlines after China took a hard stance on its tariff war with the United States.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 16, 2019. REUTERS/Brendan McDermid
After falling as much as 0.76% earlier in the session, the S&P 500 erased some losses, with traders pointing to media reports that the United States was close to a deal to remove tariffs on steel and aluminum imports from Canada and Mexico.
However, all eyes were on the worsening rift in U.S.-China trade talks, which has taken a toll on global financial markets.
The ruling Communist Party’s People’s Daily wrote the trade war will only make China stronger and will never bring the country to its knees.
“Given the trend, people want to be optimistic and both sides still want to get a deal and eventually might even get it down, but the reality is that it is much more complicated than they anticipated,” said Craig Birk, chief investment officer at Personal Capital.
Beijing’s higher tariffs on $60 billion worth of U.S. products will take effect on June 1, which could prompt Washington to go ahead with tariffs on a further $300 billion worth of Chinese goods.
The two sides are expected to meet in China to resume talks soon.
The S&P 500 has gained in the past three days after a huge sell-off on Monday, as some upbeat earnings reports and positive economic data allayed worries about the U.S. economy taking a hit from the trade war.
However, uncertainty around trade led farm equipment maker Deere & Co to cut its full-year forecast, sending its shares down 5.4%.
The drop in shares of Deere