Dow takes a breather after rally over trade

The Dow is looking to add on from Monday’s sharp gains, but a day after optimism over progress in the US-China trade spat pushed stocks higher, the stock market seems quieter.

Futures for the Dow are a modest 0.1% higher, while those for the S&P 500 and Nasdaq Composite are up 0.2% and 0.3%, respectively.

“Hope triumphed over realism yesterday, and realism is fighting back,” today, wrote Marc Chandler, chief market strategist at Bannockburn Global Forex.

On Monday, President Donald Trump said that China was keen to head back to the negotiating table. Stocks rallied in response, retracing some of the losses they had incurred on Friday, when the trade spat escalated. However, this optimism seems to have tapered off some.

With three trading days left in the month of August, the Dow is on pace for a more-than-3.5% drop. The S&P and the Nasdaq are down 3.4% and 3.9% this month, according to Refinitiv.

On the economic data front, consumer confidence for August is due at 10 a.m. ET. The data is expected to be worse compared with July’s buoyant number.