US stocks lose steam despite China trade deal, tame inflation data

Stocks dropped on Wednesday despite news of progress on a trade deal with China and inflation data that remained largely in check despite President Trump’s tariffs.

The Dow Jones Industrial Average lost 1 point, while the S&P 500 and Nasdaq dipped 0.3% and 0.5%, respectively.

Trump announced that a deal has been reached with China after days of intense trade talks in London.

“Full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!),” the president wrote in full capitalization. 

“We are getting a total of 55% tariffs, China is getting 10%. The relationship is excellent! Thank you for your attention to this matter!”

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The agreement aims to reinstate a pact reached with the nation in Geneva last month, which lowered the US tariffs on Chinese imports to 30% from 145% while China cut its tariffs on US goods to 10% from 125%. 

That temporary deal was meant to last until August 10 to give the two nations time to negotiate a more comprehensive trade agreement.

The 55% rate announced Wednesday presumably combines the 30% rate from the temporary deal with a 25% tax on steel and aluminum imports from all countries.