Concerns over the US-China trade negotiations weighed heavy on US markets on Monday. A single Tweet over the weekend from the President threatening to impose new tariffs on Chinese imports suddenly sent SPY dropping more than $6 in the pre-market trading. However, this price drop, coupled with corporate earnings releases through the day attracted the buyers and allowed SPY to mostly recover and finish the day just shy of 293.
Tuesday brought continued nervousness over the upcoming round of trade negotiations. Realization that the renewed tariff threats could have a negative impact on the Chinese perception of the talks, which could act as a blockade to resolution, tempered the markets through the day. The previous day’s recovery was dashed as SPY fell into the mid-285’s and closed the day near 288.
The gloomy outlook toward the upcoming trade battle continued on Wednesday, but despite the pessimism, traders began buying again, keeping SPY afloat at a comfortable level in the 288’s. A large batch of corporate earnings also added to the upward strength. The day ended with a sharp downward move as traders took their profits.
All eyes were looking out for developments from the trade talks on Thursday. Despite the looming tariffs, the Chinese still came to the table willing to strike a deal. The day’s early losses were quickly erased in the afternoon as SPY climbed swiftly into the high 286’s and remained there for the rest of the day. A similar pattern appeared on Friday and SPY closed off a tumultuous week a few dollars lower in the low 288’s.