U.S. stocks sputtered late in the session Thursday but still managed to close at a record high as traders were whipsawed by conflicting headlines on the progress of trade talks with China.
Early reports that the U.S. and China were prepared to exchange tariff rollbacks pushed the S&P 500 index higher throughout the day, but the rally lost some steam after Reuters said the plan was meeting resistance in the White House. White House economic adviser Larry Kudlow later told Bloomberg: "If there's a phase one trade deal, there are going to be tariff agreements and concessions."
Nearly four weeks after President Donald Trump said the two sides had reached an "agreement in principle," the White House and China continue to haggle over terms.
"Our understanding is the two sides are very close to an agreement," said Myron Brilliant, executive vice president for the U.S. Chamber of Commerce. "The timing is still to be determined."
Hopes for a mid-November signing, however, have been dashed and officials from the two countries are considering alternative options for a signing next month, if the deal is complete by then.
With the president scheduled to attend a North Atlantic Treaty Organization summit Dec. 3-4 in London, a European venue might make sense. Trump said Sunday that the signing would take place in the U.S., but Chinese officials have not agreed to that.
Before the Reuters report, haven assets from gold to sovereign bonds had been sinking — along with defensive stocks like real estate — as a risk-on mood gripped markets. Copper and crude jumped at least 2% before paring gains.
Sovereign bonds plunged around the world on the earlier positive trade news, with the 30-year Treasury yield hitting its highest since August. Ten-year French and Belgian bond yields climbed back above 0% for the first time in months, while the German equivalent surged 10 basis points. Gold fell nearly $30 an ounce before recovering some of that loss, but it still hit a three-month low.
Risk appetite had been picking up as news of progress on trade helped counter earlier reports that a preliminary accord may not happen this month as the two sides continued to wrangle over a location to sign it. But the latest headlines have left traders to wait for the next bit of news.
"Until it gets signed, I think markets are going to stay cautious, which means you're not going to price in the best-case scenario," Chris Gaffney, president of world markets at TIAA, said by phone.
This report includes material from the Washington Post.