US stocks pared gains after reports of rolling back tariffs—why?

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US Stocks Trimmed Gains Due to Internal White House Opposition to Tariff Rollbacks

US stocks reduced earlier gains following reports that rolling back existing tariffs as a component of a trade deal is encountering significant opposition within the White House and from external advisors. This development emerged despite broader market optimism stemming from China's announcement of agreeing to cancel tariffs in phases. The market's reaction highlights the sensitivity of trade negotiations and the internal dynamics influencing their potential outcomes.
Opposition to Tariff Rollbacks within the White House

Sources familiar with the trade talks indicated that the concept of rolling back existing tariffs, a key element for a comprehensive deal, is facing considerable resistance. This internal opposition suggests a divergence of views among key stakeholders in the US administration regarding the concessions to be made in the trade negotiations. The specific nature and extent of this opposition were not detailed, but its presence cast a shadow over the previously buoyant market sentiment.
Trade Deal Expectations and Market Rallies

The initial market surge was fueled by China's statement about agreeing to cancel tariffs in phases, a crucial factor for reaching an agreement to end the protracted trade war. This news propelled global stocks to a 21-month peak, with a pan-European index reaching its highest level since July 2015. On Wall Street, the Dow Jones Industrial Average and the S&P 500 closed at record highs, underscoring the market's positive initial reaction to potential de-escalation of trade tensions.
Impact on Specific Markets and Commodities

The optimism surrounding the trade deal also influenced commodity prices and currency markets. Oil prices rose, with global benchmarks climbing above US$62 a barrel. The US dollar gained against perceived safe-haven assets like the Japanese yen and Swiss franc, while gold futures settled lower. Copper prices also saw an increase, reflecting China's significant demand for the metal. However, the subsequent reports of internal US opposition tempered some of these positive movements.

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US stocks pared gains after reports of rolling back tariffs—why?

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