Those who wished that today would be a better day in terms of trade tidings are in for a disappointment.
There is no improvement that has happened overnight and for some, it has got worse. The overall overview for a near-term deal is getting lesser with the present pressure on the stock markets. It is still ramping up the new U.S. tariffs that are likely to come in to effect on Friday. As per reports, it is clear that China has backed-down from various parts of the deal. Thus reversing the previous commitments.
The negotiations will begin again tomorrow in Washington. It is still unclear on the correct path and the time required for it. It is important that many people are talking about the final announcements to be done. However, presently everything is under reconsideration. Across Wall Street, the various tariff situations will be taking all the importance of the room. Various negative news in geopolitics is in the picture.
Various investors have faced uncomfortable rides and are expecting a better landing. The CBOE volatility index has grown by 21 and reached a new four-month high. This is a likely sign of choppy action ahead. In such a scenario, it is important to keep investors to be with plans and not worry about everything that is happening in the market.
In the previous month, the market was building hope owing to the upcoming trade deals. However, in the last two days, some premium started getting extracted. This is likely to keep continuing through Wednesday. The main question here is reflection across the rise in the tariff. This will be difficult to identify and most likely the market will react differently.
During the period of March-May, the S&P 500 grew by 5%. Presently, it is now approximately about 2% from its highs. This value is still 3% more than the one reported during the last 6 weeks.