U.S. equities finished modestly lower, paring early gains and snapping a five-session winning streak, as upbeat sentiment on ramped-up Fed rate cut expectations and cooling trade concerns with Mexico was tempered amid a new round of posturing within the U.S./China trade standoff. Reports suggesting further Chinese stimulus measures appeared to provide the early support, but uncertainty of a meeting between U.S. President Trump and Chinese President Xi at the G-20 summit clouded sentiment. Treasury yields were mostly higher amid some upbeat economic data, with wholesale price inflation remaining subdued and U.S. small business optimism unexpectedly improving. Elsewhere, the U.S. dollar and gold ticked lower, while crude oil prices inched higher.

The Dow Jones Industrial Average (DJIA) fell 14 points (0.1%) to 26,049, the S&P 500 Index lost 1 point to 2,886, and the Nasdaq Composite declined nearly a point to 7,823. In moderate volume, 865 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq. WTI crude oil inched $0.01 higher to $53.27 per barrel and wholesale gasoline was up $0.03 at $1.76 per gallon. Elsewhere, the Bloomberg gold spot price fell $1.02 to $1,326.96 per ounce, and the Dollar Index— a comparison of the U.S. dollar to six major world currencies—ticked 0.1% lower to 96.71.

The Producer Price Index (PPI) showed prices at the wholesale level in May ticked 0.1% higher month-over-month (m/m), matching the Bloomberg forecast, and following April’s unrevised 0.2% rise. The core rate, which excludes food and energy, was up 0.2% m/m, in line with expectations, and after April’s unadjusted 0.1% increase. Y/Y, the headline rate was 1.8% higher, below projections of a 2.0% rise and compared to April’s unadjusted 2.2% increase. The core PPI rose 2.3% y/y last month, matching estimates and versus April’s unrevised 2.4% rise.

The National Federation of Independent Business (NFIB) Small Business Optimism Index for May rose to 105.0 from April’s unrevised 103.5 level, and versus expectations of a decrease to 102.0. The report noted that sales improved, the inventory soft spot seen in last month’s report rebounded, and profit trends posted a very solid advance. Also, job creation plans gained, hiring remained strong, and expectations for sales, business conditions, and credit conditions all improved.

Treasuries were mostly lower, as the yield on the 2-year note rose 3 basis points (bps) to 1.93% and the yield on the 10-year note ticked 1 basis point higher to 2.15%, while the 30-year bond rate was little changed at 2.62%. Stocks came off the highs of the day to trade near the unchanged mark after posting five-consecutive sessions of gains that have been underpinned by rising expectations of a Fed rate cut, which accelerated after Friday’s softer-than-expected May nonfarm payroll report. Meanwhile, the migration agreement with Mexico that averted plans for increased tariffs has also lent support.

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