Wall Street week ahead: Tariff deadline keeps focus on trade as 2019 draws to close

Political tensions over U.S. support for protesters in Hong Kong and over Beijing’s treatment of its Uighur Muslim minority have also raised concerns about the prospects for an initial trade deal.

“Without a phase one plan on getting something signed early in the new year, I think the market is susceptible for a pullback,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC.

The focus will remain on trade into next week, even as the Federal Reserve holds its last meeting of 2019, with the U.S. central bank expected to keep interest rates steady after three cuts earlier in the year.

“The Fed chairman pretty much outlined that the bar is very high to raise rates,” SunTrust’s Lerner said.

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However, he added, if some of the tariffs result in a sharp slowdown, “the Fed would have to act eventually” by cutting rates.

Investors will also be looking for signs of strength in the holiday shopping season, given that consumer spending is seen as a key pillar holding up overall economic growth.

There is a strong incentive to push off the tariffs “as long as people are at the negotiating table,” said Carol Schleif, deputy chief investment officer at Abbot Downing in Minneapolis.

“President Trump definitely doesn’t want a downbeat consumer going into the election cycle,” she said.