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As stocks struggle to break to new highs, markets could be swayed by Fed speakers, trade

Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on August 19, 2019 in New York City.

Drew Angerer | Getty Images

Developments in U.S.-Chinese trade talks and the comments from a host of Fed speakers could be important for markets in the week ahead, as stocks struggle to regain highs.

The Fed in the past week cut interest rates for the second time in two months, but the latest forecasts of Fed officials showed just how divided they are on the need for future rate cuts. Five wanted deeper cuts, five didn’t want any cuts and another seven were happy with the Fed’s action.

“The market seems like it’s pretty jumpy based on what the say. i think it would flip back and forth depending on how the headlines come out,” said Tom Simons, money market economist at Jefferies. Simons said the focus will also be on the Fed’s operations in the short-term funding market, after turbulence in the overnight market in the past week temporarily sent some overnight rates sharply higher.

There are nearly a dozen Fed speakers on the calendar in the coming week, but Fed Chairman Jerome Powell is not scheduled to speak.

Trade developments could continue to cause volatility in markets. Reports Friday that Chinese agriculture officials canceled visits to farms in Montana and Nebraska sent stocks lower, for fear it signaled that talks were not making progress.

Stocks in the past week were lower, with the S&P off about 0.5% to 2,992. The index had been around 1% away from its all-time high for a few weeks.

“Tech that has been out of play and is acting faulty. it’s now turning into a headwind, and that could cause a problem for the bulls,” said Scott Redler, partner with T3Live.com. “I haven’t seen so many mixed signals in the market in quite some time.”

“It’s hard for the market to make new highs without tech. At best, it’s concerning when you see key names, like Amazon and Netflix, not just failing to lead but faltering,” he said. Netflix was down more than 8% for the week, and Amazon was off 2.6%.

Redler said it was a concern that shares of market leader Microsoft gave up its initial gains and turned negative,  soon after it announced a buyback and raised its dividend. “Strength was sold instead of embraced,” he said. “That was good news. What are they going to do when bad news happens?”

Following the attacks on Saudi Aramco last week, the United Nations General Assembly in New York and meetings around it take on more importance for markets. U.S. and Saudi Arabian officials have said Iran was behind the attack, which knocked a significant amount of Saudi oil production off line. Iran has denied involvement, and Houthi rebels in Yemen have claimed responsibility.

Iran’ President Hassan Rouhani has been given a visa to travel to New York for the UN. Before the attack on Saudi Arabia last week, President Donald Trump had suggested he would speak to Rouhani but there seems little chance of that now. Oil have been highly volatile, with Brent crude futures up 7% since the