Stocks close mostly flat as Trump-Xi meeting approaches

The U.S. trade deficit narrowed in February to $43.56 billion, the Commerce Department said. Economists expected it to have narrowed to $44.8 billion from a five-year high.

Equities traded higher earlier in the session after Trump hinted at bank deregulation. Trump said his administration will make it easier for banks to lend money, adding they will do a “massive haircut” to Dodd-Frank.

“There’s a lot of nervousness built into the market, but Trump’s comments that we’re going to get rid of ‘horrible’ regulations is bullish for stocks,” said Adam Sarhan, CEO of 50 Park Investments.

Treasury yields — which move opposite to prices — rebounded, with the benchmark trading near 2.35 percent after touching it lowest level since late February.

Other data released Tuesday included factory orders for February, which rose 1 percent, in line with expectations.

“There has been this undercurrent in the market about whether the economy is softening,” said Quincy Krosby, market strategist at Prudential Financial. She also said investors are growing wary about the timing of Trump’s proposed tax reforms.

“The president said he was going to move toward tax reform, but now he’s talking about health care” again, she said.

The possibility of tax reform coming from the new administration has been at the crux of the stock market’s rally since the U.S. election. That said, the three major indexes have remained in a tight range recently, as Treasurys regained ground.

10-year yield in 2017

Source: FactSet

Overseas, European equities traded mostly higher, with the Stoxx 600 index rising 0.2 percent. In Asia, stocks closed mostly lower, with the Nikkei 225 sliding 0.91 percent and the Kospi falling 0.3 percent.