SPY, QQQ Recover Losses Amid Trade Deal Optimism as Rate Cut Expectations Fade
U.S. equity ETFs staged a midday recovery as trade negotiations took center stage. The SPDR S&P 500 ETF (SPY) erased most losses while the Invesco QQQ Trust (QQQ) closed positive, reflecting renewed risk appetite following bilateral agreements with six nations.
Switzerland and Liechtenstein agreed to $200 billion and $300 million in U.S. investments respectively, securing tariff reductions from punitive 39% levels. Four Latin American nations established agricultural trade pacts expected to lower U.S. grocery prices, with reciprocal concessions for American farm and medical exports.
The market's reassessment of Fed policy added complexity to the session. Probability of December rate cuts plunged below 20% in Fed funds futures, creating headwinds for growth-sensitive assets despite the trade breakthrough.
