Dow pulls back from record Monday as Trump says reports on ‘level of tariff lift is incorrect’

U.S. stock benchmarks traded lower late-morning Monday as investors’ optimism for a near-term U.S.-China trade deal waned after President Donald Trump played down his willingness to remove tariffs on Chinese imports.

Meanwhile, bond markets were closed for Veterans Day. Investors were awaiting speeches from President Donald Trump and Federal Reserve Chairman Jerome Powell later in the week.

How are major benchmarks performing?

The Dow Jones Industrial Average 

DJIA, -0.16%

fell 108 points, or 0.4%, to 27,573, the S&P 500 index

SPX, -0.30%

declined 10 points, or 0.3%, at 3,083, while the Nasdaq Composite Index

COMP, -0.27%

fell 23 points to reach 8,452, a decline of 0.3%.

On Friday, the Dow added 6.44 points, or 0.02% to close at a record of 27,681.20, the S&P 500 advanced 7.90 basis points, or 0.26%, to seize a fresh closing high of 3,093.08. The Nasdaq rose 40.80 points, or 0.48%, at 8,475.31, another record.

Last week, the Dow added 1.2% while the S&P 500 gained 0.8% and the Nasdaq advanced 1%.

What’s driving the market?

President Donald Trump over the weekend said discussions with China and the U.S. were going “very nicely” but cautioned that recent reports about an agreement to roll back tariffs, as a part of a preliminary trade resolution, weren’t accurate. “The level of tariff lift is incorrect,” Trump said on Saturday at the Joint Base Andrews before leaving for a visit to Tuscaloosa, Ala., Reuters reported. He didn’t elaborate on those comments.

Trump also suggested that the pace of talks were going more slowly than he would prefer and that China had more to benefit from striking a tariff resolution soon.

“The trade talks with China are moving along, I think, very nicely and if we make the deal that we want it will be a great deal and if it’s not a great deal, I won’t make it,” the president said.

“Stocks hit fresh new highs last week on a familiar theme: Positive chatter/headlines on phase one of a U.S./China trade deal, while earnings and global data have been better than feared,” wrote Tom Essaye, president of the Sevens Report, in a Monday note to clients.

These hopes were “somewhat downplayed by President Trump on Friday and more forcefully over the weekend, but at the same time he did acknowledge it was being considered, so it’s something we have to watch for,’ he added. “While that’s clearly a potential positive, it’s also adding to a lot of positive expectations that are already priced into the S&P 500 at 3,100.”

Investors were also watching reports of clashes in Hong Kong as a monthslong protest flares up. The Wall Street Journal reported that police shot and critically injured a protester as the city’s start-of-week commute was disrupted by demonstrators trying to block roads and delay trains. The paper also said one man was seen set ablaze in one unverified video, after he confronted protesters who had been vandalizing a subway station.

Meanwhile, the Securities Industry and Financial Markets Association, or Sifma, has recommended the bond market’s closure in line with the U.S. Treasury Department’s holiday schedule.

There will be no economic data released on Monday, though investors were parsing a speech from Boston Fed President Eric Rosengren, who argued Monday that regulators around the world should be increasing capital buffers for large banks.

Looking ahead, Trump will speak at the Economic Club of New York on trade Tuesday, and Fed Chairman Powell is scheduled to appears on Wednesday before the Congressional Joint Economic Committee and then in front of the House Budget Committee, a day after.

Which stocks are in focus?

Boeing Co.

BA, +2.40%

 shares were down 0.8% in Monday, after American Airlines Group Inc.

AAL, -0.49%

and Southwest Airlines Co.

LUV, -0.50%

 extended their 737 Max cancellations until early March.

Shares of General Electric Co

GE, -1.04%

 were down about 1.4% after the industrial conglomerate closed at a better-than one-year high on Friday. The company’s stock had risen about 27% since the Oct. 30 release of third-quarter earnings, through Friday’s close.

Tupperware Brands Corp.

TUP, -3.37%

 suspended its dividend late Friday, sending shares in the company down 2.4% Monday.

Shares of Apple Inc.

AAPL, +0.21%

 and Goldman Sachs Group

GS, -1.07%

 were 0.2% higher and 1.1% lower, respectively after The New York Department of Financial Services said its opening a probe into the new Apple Card after a series of tweets from a technology entrepreneur David Heinemeier Hansson accused it of gender discrimination.

U.S. traded shares of Alibaba Group Holding Ltd.

BABA, -1.24%

 fell 1.6% Monday, during the Chinese e-retailer’s “single’s day” sales event, an annual marketing event that is the world’s busiest shopping day.

How are others assets trading?

December gold

GCZ19, -0.48%

 on Comex fell 0.8%% at $1,450.90 an ounce after putting in a weekly loss of 3.2%, marking its sharpest weekly loss in more than two years, according to FactSet data.

West Texas Intermediate crude for December delivery

CLZ19, -0.30%

 was flat at $57.24 on the New York Mercantile Exchange, after a weekly gain of 1.9% during the five sessions ended Friday.

The ICE U.S. dollar index

DXY, -0.18%,

a gauge of the greenback’s performance against six major rivals, was off 0.2%.

In Asia overnight, the China CSI 300

000300, -1.76%

 fell 1.8%, and the Shanghai Composite

SHCOMP, -1.83%

 declined 1.8%. Hong Kong’s Hang Seng Index

HSI, -2.62%

 fell 2.6%, while Japan’s Nikkei 225 Index

NIK, -0.26%

slipped 0.3%.

In Europe, the Stoxx Europe 600’s

SXXP, -0.02%

was up less than 0.1%

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