US Stock Market Overview – Stocks Close Mixed, ISM Services Beats

US stocks closed mixed on Tuesday with the Dow and Nasdaq closing in the black, and the S&P bucking the upward trend. Both the Dow Industrials and Nasdaq hit fresh all-time highs, while the S&P traded on the defensive. Sectors were mixed, with cyclicals outperforming, real-estate was the worst-performing sector in the S&P 500 index. The US ISM services index came in stronger than expected which possibly points to the trough in US growth. The trade deficit declined by a wider than expected which helped the US dollar gain traction. Before the opening bell, futures prices were higher, as news that the Chinese have requested a pullback of tariffs from September. It also appears that the Chinese have leverage and this is likely to occur so Trump will be able to signal a victory.

ISM Services Beats

The ISM reported that its non-manufacturing index grew to 54.7% last month, up from 52.6% in September. Measures sales, as well as new orders and employment all, rebounded from the previous month. The stronger than expected number helped lift riskier asset and helped buoy the US dollar.

Trade Figures Miss Expectations

There has been a lot of effort put in by the Trump administration to get the trade deficit in line. On Tuesday the Commerce Department reported that the US trade deficit contracted to $52.5 billion in September. The deficit was slightly above expectations of $52.2 billion. August’s deficit was just over $55 billion. The current trade deficit is 5.4% higher than the same period in 2018, year over year. Recent negotiations has allow the deficit with China to fall 3.1% to $28 billion for the month. Exports declined $1.8 billion to $206 billion while imports also were down, dropping $4.4 billion to $258.4 billion. The U.S. recorded its first petroleum surplus, of $252 million, since 1978 as the nation continues to push its energy output. Imports of consumer goods fell $2.5 billion. Capital goods imports were off $1.1 billion on a $600 million reduction in semiconductors. Automotive imports were down $1.1 billion.