(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.
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.
“It (bank earnings) is reflective of where we