The benchmark S&P 500 index ended little changed on Tuesday as investor optimism regarding the Federal Reserve’s expected affirmation of its dovish policy stance was offset by reports of fault lines emerging in ongoing U.S.-China trade negotiations.
Financial stocks weighed on all three major equity indexes, which gave up early gains following a Bloomberg report that China is pushing back against American demands in trade talks.
The Dow Jones Industrial Average snapped a four-day winning streak, while the Nasdaq limped back into positive territory just before the closing bell.
As the Fed convened its two-day policy meeting, investors expected little change in its measured approach to interest rate hikes.
Its summary of economic projections, or dot plot, due for release on Wednesday, will be closely scrutinized for clues regarding the extent of the central bank’s patience, while some question whether the dot plot deserves this level of scrutiny.
A report from the Commerce Department indicated a smaller-than-expected increase in factory orders, the latest in a string of underwhelming economic data that has supported the Fed’s more accommodative stance.
Ford rose 1.5 percent after the automaker announced it would boost domestic production of its high-profit SUVs.
Online food delivery platform Grubhub fell 8.4 percent after Keybanc warned of diminished customer spending and user retention.
Nvidia Corp ended the trading day up 4.0 percent on news that the company has partnered with Softbank and LG Uplus to deploy cloud gaming servers in Japan and South Korea later this year.
The chipmaker provided the largest improvement to the Philadelphia SE Semiconductor Index, which is up nearly 22 percent so far this year.
Approximately 7.33 billion shares changed hands on the major domestic equity exchanges, as compared to the 7.56 billion share average over the past 20 trading days.
Factory Orders a Bit Moribund
New factory orders rose less than expected in January and shipments fell for a fourth straight month, offering more evidence of a slowdown in manufacturing activity.
According to Tuesday morning’s report by the Commerce Department, orders edged up 0.1 percent, held back by decreases in orders for computers and electronic products, after rising by the same margin in December. There were also declines in demand for primary metals and fabricated metal products. Factory orders increased 3.8 percent compared to January 2018.
Shipments of factory goods fell 0.4 percent after dropping 0.2 percent in December. They have now declined for four consecutive months, the longest streak since mid-2015.
Factory orders are likely to remain soft as unfilled orders rose only 0.1 percent in January after dropping for three straight months.
Stocks at manufacturers jumped 0.5 percent in January after edging up 0.1 percent in the prior month.
The release of the report was delayed by the government shutdown.
Manufacturing, which accounts for about 12 percent of the economy, is losing momentum as the stimulus from last year’s $1.5 trillion tax cut package fades. Activity is also being hampered by a trade war between the United States and China as well as by last year’s surge in the dollar and softening global economic growth, which are hurting exports.
In January, orders for machinery rose 1.5 percent after falling 0.4 percent in December. Orders for mining, oil field and gas field machinery fell 2.7 percent after tumbling 8.2 percent in December.
Orders for electrical equipment, appliances and components rebounded 1.4 percent after dropping 0.3 percent in December. Computers and electronic products orders fell 0.9 percent after decreasing 0.4 percent in December.
Primary metals orders declined 2.0 percent and fabricated metal products orders fell 0.6 percent. Transportation equipment orders increased 1.2 percent in January, slowing from the prior month’s 3.2 percent rise.
Orders for civilian aircraft and parts increased 15.6 percent in January. Motor vehicles and parts orders gained 0.4 percent.
The Commerce Department also said January orders for non-defense capital goods excluding aircraft, a measure of business spending plans on equipment, rose 0.8 percent as reported last week. Orders for these so-called core capital goods fell 0.8 percent in December.
Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, also increased 0.8 percent in January as previously reported. Core capital goods shipments edged up 0.1 percent in December.