U.S. stock indexes hung close to their record levels in afternoon trading on Monday, as markets wait for the next development in trade talks between the United States and China.
All three major indexes were nearly unchanged from where they finished Friday, but the seemingly placid moves masked plenty of churn going on underneath. The S&P 500 was split nearly evenly between winners and losers, and strength for technology and media stocks made up for sharp losses by oil producers.
The market has been on a tear since early October, and indexes have set all-time highs as worries about a possible recession faded. The gains have been not only strong but also nearly uninterrupted, bolstered by solid economic data, better corporate earnings than analysts expected and interest-rate cuts by the Federal Reserve.
That leaves negotiations in the U.S.-China trade war as the remaining wild card for the market. President Donald Trump hoped to have signed the first phase of a trade deal by now, at a major international summit that was scheduled for this past weekend. But the president of the summit’s host nation, Chile, canceled the meeting last month amid nationwide protests.
The two sides are continuing to negotiate, with stock markets around the world swinging on every hint of progress or tension.
“Things are somewhat stable right now, which is really crazy when I think about the geopolitical issues going on abroad and in the U.S.,” said Mike Loewengart, vice president of investment strategy at E-Trade Financial. “But we caution investors to have reasonable expectations for additional gains going forward: Hope for the best, but be mindful that we could see an uptick in volatility at any time.”
KEEPING SCORE: The S&P 500 index was up 0.1% as of 2:15 p.m. Eastern time. It drifted between small gains and losses through the day and was down 0.3% shortly after trading began.
The Dow Jones Industrial Average rose 32 points, or 0.1%, to 28,037. The Nasdaq added 0.1%. The Russell 2000 index of smaller company stocks fell 0.3%.
CHURNING: The modest gains for market indexes mask how much movement was going on underneath.
Energy stocks in the S&P 500 sank 1.7% for the largest loss by far among the 11 sectors that make up the index. Chevron dropped 1.7%, and ConocoPhillips sank 3.1% as prices of oil and natural gas fell.
Benchmark U.S. crude lost $1 to $56.72 per barrel. Brent crude, the international standard, sank $1.14 to $62.16 per barrel, and natural gas lost 3.5% to $2.59 per 1,000 cubic feet.
GUARDING THE GAINS: The day’s strongest stocks were in areas of the market that tend to pay big dividends and hold up even when the economy is slowing.
Real-estate stocks in the S&P 500 rose 0.8%, for example, while utilities and companies that make everyday goods for households both rose 0.7%.
These kinds of stocks are known as “defensive” investments, and they had begun to lag the market in recent weeks as interest rose in companies whose profits can rise more quickly in a healthy economy.
But a drop in Treasury yields Monday may have made the dividends paid by defensive stocks more attractive.
The yield on the 10-year Treasury fell to 1.80% from 1.83% late Friday.
HOO AH: Technology stocks also rallied after the Commerce Department gave another 90-day extension for Chinese tech giant Huawei to continue doing business with U.S. companies.
Nvidia bolted to the biggest gain in the S&P 500, up 4.3%, and Advanced Micro Devices rose 2.6%.
WEEK AHEAD: Several big retailers will report their results for the summer this week and close out the latest earnings season. More than 90% of companies in the S&P 500 have reported their latest earnings.
Home improvement retailer Home Depot will report results on Tuesday. Target and Lowe’s will report results on Wednesday. Macy’s and Gap will release their earnings on Thursday.
Investors will get a more detailed look at the Federal Reserve’s latest decision to cut interest rates when the central bank releases minutes from its October meeting on Wednesday.