Major US equity indices struggled to build on last week’s strong gains and kicked off a busy week on a subdued note.
Markets have shown remarkable resilience to an escalation of trade tensions between the US and its major allies, especially after the G-7 meeting over the weekend where Trump withdraw his support for the group’s communiqué after Trudeau criticized the recent US tariffs on Canadian metals.
With trade jitters doing little to dampen investors’ confidence, focus now turns to a highly anticipated summit between the US President Donald Trump and North Korean leader Kim Jong Un in Singapore.
Apart from geopolitical developments, investors this week also confront the outcome of crucial monetary policy meetings by the Federal Reserve and the European Central Bank. The Fed is widely anticipated to raise interest rates at the end of a two-day meeting on Wednesday and the ECB is expected to outline the plan to eventually end its massive monthly bond purchase program.
A combination of key central bank decisions and monetary policy outlook would drive investors’ sentiment for riskier assets – like equities and eventually provide some fresh directional impetus for the markets.
During the opening hour of trade, the Dow Jones Industrial Average treaded water near Friday’s closing level, around 25,315, while the broader S&P 500 Index added over 3-points to 2,782. Meanwhile, tech-heavy Nasdaq Composite Index turned out to be a relative outperformer and climbed nearly 11-points to 7,656.
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