Stocks ended higher Friday but posted their first weekly decline in over a month amid lingering worries around U.S.-China trade talks.
The Dow ended 109 points higher. The S&P 500 gained 0.22%, while the Nasdaq advanced 0.16%.
President Donald Trump told Fox News both sides were very close to reaching a trade agreement, nothing: “We have a very good chance to make the deal.”
His comments came after Chinese President Xi Jinping said Friday that Beijing wants to work for a trade deal with the U.S. but is not afraid to “fight back.” Xi also told a visiting U.S. business delegation that China holds a “positive attitude” toward the trade talks.
To be sure, investors took some profits off the table this week. For the week, the S&P 500 was down about 0.6% and was set to snap a six-week winning streak. The Dow was down 0.8% and headed for its first one-week pullback in five. The Nasdaq was on pace to end a seven-week winning streak, dropping 0.6% for the week.
“The volatility we’ve had this year has been mostly around trade,” said Jennifer Ellison, a principal at BOS. “I think the market has gotten to a point of confusion and wants to wait and see when something real happens.”
Stocks recently rallied to record highs after Trump said last month that China and the U.S. had reached a “phase one” trade deal that would be signed in November. However, concerns over that so-called phase one deal have risen lately.
The Wall Street Journal reported Thursday that China had invited the U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for further talks. However, it is unclear whether the invitation was accepted.
The investment community is unsure whether both countries will sign some sort of trade agreement in the coming weeks. Morgan Stanley said Thursday that a phase one deal is perhaps the furthest both countries will go.
“A few weeks ago when President Trump said a phase one deal was complete, optimism was sky high,” said Ryan Nauman, a market strategist at Informa Financial Intelligence. “Each passing day that we don’t have ink on the paper, investors are just getting more skittish and markets are getting more fragile, especially at these levels.”
On the data front, consumer sentiment for November came in better than expected. The index rose to 96.8 from 95.5 in October. IHS Markit’s gauges for the U.S. services and manufacturing sectors also rose.
“We had some good economic data today. That helped the market,” said Peter Cardillo, a chief market economist at Spartan Capital Securities. “But the market has reached a point in which it’s a bit stretched.”