On Monday, the market exhibited a weak open as participants prepared for the upcoming trade talks to occur later this week, following a turbulent start to the month of October accompanied by worries that the world’s largest economy might be proceeding into a recession. During the early trading, the S&P 500 dropped 11 points, going down 0.4%. However, a hint of optimism was still seen as bets about the Federal Reserve having a third rate cut this year increased.

Last month’s compromise had investors hoping that this was a sign of the lengthened trade wars finally coming to a conclusion. However, worries still arose as Thursday approaches, since a high-level talk is set to begin on that day. Investors are worried over the possible outcome of these negotiations. According to Bloomberg, the officials from China are progressively hesitant to agree to the broad trade deal that U.S. President Donald Trump has been pushing.

Regarding this, Rick Meckler of Cherry Lane Investments in New Vernon, New Jersey, stated that at the moment, market participants have their focus on the results of the negotiations. However, most of them have turned fairly pessimistic about the possibility of something being definite this week.

Another report from Bloomberg during the weekend, suggesting that the trade war between the two largest economies is still a long way from a resolution hit investor sentiment, considering the significance of the current indefiniteness in the trade when it comes to the global economy’s deceleration.

In other news, according to CME Group's FedWatch tool, investors perceive a 77.5 percent possibility of rates being cut by a quarter percentage point during the policy meeting that the Federal Reserve will have before the end of the month.

By: Cyril Latrice Cajanding