Who is driving the market?

The S&P 500 Index dropped 1.3% at 9:52 a.m. in New York, falling for a third straight day.

Dow Jones futures turned lower Tuesday morning, along with S&P 500 futures and Nasdaq futures, after President Donald Trump said he might favor waiting until after the 2020 election to strike a China trade deal.

“In some ways, I like the idea of waiting until after the election for the China deal,” Trump told reporters in London, where he was due to attend a NATO summit. “But they want to make a deal now, and we’ll see whether or not the deal’s going to be right. It’s got to be right.”

This contradicts Trump's earlier statements about negotiations going well. But investors chose to focus on the downside risk, because a trade deal between the United States and China has been pretty much priced in ever since the two countries came to a preliminary verbal agreement in October. This agreement was never signed.

The US-China trade talks face a Dec. 15 deadline for new US tariffs to kick in on about $156 billion worth of Chinese imports, including smartphones and laptops, though Trump could postpone the tariffs, as he did in October.