china and us flags

A Chinese and US national flag hang on a fence at an international school in Beijing.
U.S. stocks fell at the start of trade Friday amid uncertainty over the state of U.S.-China trade talks, ahead of a planned news conference by Chinese officials at 10 a.m. Eastern Time.

Meanwhile, a decisive victory for Conservatives in Thursday's U.K. election that reduces policy uncertainty and clears a path for Brexit was also seen as boosting sentiment.

How are benchmarks performing?

The Dow Jones Industrial Average DJIA, +0.16% fell 41 points, or 0.2%, to 28,083, while the S&P 500 index SPX, +0.10% rose 5 points, or 0.2%, to 3,165 and the Nasdaq Composite index COMP, +0.30% were down 5 points, or 0.1% at 8,712.

On Thursday, the Dow closed 220.75 points, or 0.8% higher, at 28,132.05, just shy of a new all-time high. The S&P 500 indexgained 0.9% to close at 3,168.58, and the Nasdaq Composite Index added 0.7% to 8,717.32, both new records.

For the week, the Dow is set to gain 0.4%, while the S&P and Nasdaq are poised for gains of 0.7% each.

What's driving the market

The state of U.S.-China trade relations remains in flux Friday morning after a series of reports in U.S. media said that a deal to roll back tariffs had been reached, though without official confirmation from Chinese officials, who had planned to deliver a press conference on the topic at 9:30 a.m. Eastern Time, later postponed to 10 a.m.

Stocks climbed Thursday after President Donald Trump first said on Twitter that the U.S. and China were nearing a "big deal" that could avoid fresh tariffs, planned to go in effect Dec. 15, and potentially roll back some existing duties. The Wall Street Journal later reported a limited trade deal had been agreed, citing sources.

A spokesman for China's Ministry of Commerce, Gao Feng, told reporters in Beijing on Friday that "the economic and trade teams of both sides have maintained close communication," but offered no additional details, the Associated Press reported. China has announced a press conference for 9.30am ET CNBC reported, subsequently delayed by half an hour.

A Bloomberg report earlier said President Trump has signed off on the proposed deal Thursday afternoon, which includes a "promise by the Chinese to buy more agricultural goods," though Beijing had previously balked at making a firm commitment to purchase a specific dollar amount of such products.

"Global stocks rallied to record territory for the first time since early 2018 after President Trump signaled the December 15th new tariffs will be put off and we could eventually see the older ones reduced," wrote Edward Moya, senior market analyst at Oanda, in Friday note to clients.

"The White House is expecting to make an official announcement later today," he added. "Investors however are growing anxious that we have yet to hear China confirm the deal on their end."

Meanwhile, Prime Minister Johnson's Conservative Party swept to a landslide victory in the U.K. election Thursday, securing a strong majority in Parliament. The convincing win gives him plenty of support to secure a Brexit deal and negotiate a new relationship with the European Union next year.

Brexit questions have been cited as one lingering headwind for global investors. Trump congratulated Johnson on his election victory early Friday via Twitter, and said Britain and the U.S. were now free to strike a "massive new trade deal" after Brexit.

In economic data, U.S. retail sales rose just 0.2% higher in November, below the 0.5% expected by economists polled by MarketWatch, though sales in October were revised to show a 0.4% increase, up from 0.3%. The figures were dragged lower by a decline in purchases at department stores, restaurants, clothing stores, pharmacies and outlets that sell sporting goods, while internet-based sales jumped 0.8%.

The cost of imported goods, meanwhile, rose 0.2%, the fastest since may, driven by higher oil costs.

At 10 a.m. ET the Census Department will issue a report on business inventories, and at 11 a.m. New York Fed President John Williams will deliver a lecture on monetary policy to students at the Borough of Manhattan Community College.

Which stocks are in focus?

Broadcom Inc. AVGO, -3.47% shares fell 3.7%, after it missed fourth quarter profit forecasts late Thursday, though it raised its outlook for 2020.

Oracle Corp. ORCL, -2.37% were under pressure after the software company posted better-than-expected earnings for its fiscal second quarter but came up a bit short on revenue, where it has struggled for years. Shares fell 3.4%.

Costco Wholesale Corp. COST, -1.16% declined 1.5% after the bulk retailer reported fiscal first quarter profit growth Thursday evening that beat analyst expectations, but sales growth that fell short.

Adobe Inc. ADBE, +5.05% shares gained 4% after the digital marketing and media company reported fiscal fourth-quarter adjusted earnings that beat analyst expectations and a more than 20% increase in revenue after the close Thursday.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -1.52% fell 3.6 basis points Friday to 1.865% after surging to a four-week high Thursday.

Crude oil prices were on the rise, with West Texas Intermediate crude CLF20, +0.47% rising 29 cents, or 0.5% to trade at $59.43 a barrel on the New York Mercantile Exchange. Gold prices GCG20, +0.24% were also edging higher, up $2.80, or 0.2%, to trade at $1,474.80 an ounce on Comex.

The U.S. dollar lost value against a basket of its trading peers, with the U.S. dollar index DXY, -0.27% declining 0.5%.

In Europe, stocks were rallying with the Stoxx Europe 600 SXXP, +1.34% up 1.1%.

In Asia overnight, stocks rallied, with the China CSI 300 000300, +1.98% gaining 2%, Japan's Nikkei 225 NIK, +2.55% adding 2.6% and Hong Kong's Hang Seng index HSI, +2.57% rising 2.6%.