Stocks reverse course after Trump spars with Pelosi and Schumer

All three of the major indexes were trading in negative territory Tuesday afternoon after a contentious public meeting between President Donald Trump and Democratic congressional leaders Chuck Schumer and Nancy Pelosi.

Trump maintained that there must be funding for a US-Mexico border wall from Congress and warned that he would shut down the government without it.

The Dow swung more than 500 points from its highs to its lows Tuesday. Both the S&P 500 and Nasdaq were trading slightly higher, though still down for the day.

Investors were heartened earlier in the day by renewed hopes that the United States and China might be able to reach a new deal on trade, despite tensions over the arrest of the CFO of Chinese tech giant Huawei.

Trump tweeted Tuesday morning that there were "very productive conversations going on with China!" and added that people should "watch for some important announcements!"

Still, the market seemed skeptical. Dow components with significant exposure to China, including Apple (AAPL), Boeing (BA), Caterpillar (CAT) and 3M (MMM) were all lower.

Alec Young, managing director of global markets research for FTSE Russell, wrote in a report Tuesday that "despite incrementally positive overnight news on US-China trade negotiations, much remains unresolved."

Young noted that "if the trade war continues to escalate," that could lead to significant cuts in forecasts for US economic growth in 2019. He added that earnings projections for Corporate America would need to be cut as well.

"That's why cyclical stocks keep shrugging off what look like positive overnight trade headlines. The uncertainty needs to be removed vs. just reduced a little bit," he said.