Dow Jones & Nasdaq 100 Waver on US-China Trade Tensions

US stock futures wavered on the news, while Mainland China’s CSI 300 and the Shanghai Composite were down 0.55% and 0.64%, respectively, in morning trading.

However, Mainland equity markets avoided heavy losses amid optimism over President Trump and President Xi Jinping reaching a trade deal at the October 31-November 1 APEC Summit.

US Stock Futures Mixed

Trump’s latest move to restrict China’s access to US tech clashed with market bets on Fed rate cuts in October and December.

The Dow Jones E-mini dropped 2 points in early trading on Thursday, October 23. Meanwhile, the Nasdaq 100 E-mini and the S&P 500 E-mini rose 64 points and 12 points, respectively. A more dovish Fed rate path would lower borrowing costs, potentially boosting earnings for capital-intensive tech firms.

According to the CME FedWatch Tool, the chances of a 25-basis point Fed rate cut in October stand at 96.7%, with a 96.7% chance of a December cut.

Markets are betting on back-to-back Fed rate cuts amid the prolonged US government shutdown. The Senate stalemate has delayed key economic reports, such as the jobs report, supporting a more dovish Fed policy stance.