As world leaders converge on the G20 summit in Buenos Aires over the weekend, Wall Street remains cautious. Much hinges on the outcome of the summit, which kicked off Friday, November 30. The summit is of particular importance to markets because US President Donald Trump and Chinese President Xi Jinping are expected to discuss the contentious trade issues ongoing between the two countries.

The outcome of Trump’s G20 meeting with Xi, including a new trade agreement, will heavily affect investor confidence in the near-term.

However, on the eve of the summit, uncertainty remained, prompting investors to stay on the sidelines and getting the stock market off to a rough start. By midday on November 29, the S&P 500 Indexwas down nearly 9 points (0.32%), the Dow Jones Industrial Averagewas down over 50 points (0.20%) and the NASDAQ Compositewas down 25 points (0.35%).

According to Reuters, President Trump has sent conflicting signals regarding a possible trade deal with China, saying Washington was close to making a deal before changing tack and saying he likes where things stand now. Adding to the uncertainty, it’s been reported that White House trade adviser Peter Navarro, who has pushed for a hawkish position against China in the past, would be attending the G20 summit as well.

“There is so much conflicting commentary from the administration that something definitive has to happen for the market to really get excited about it,” said Michael Antonelli, Managing Director of Institutional Sales Trading at Robert W. Baird in Milwaukee. “The market is tense and waiting for some type of hint that we are closer to a resolution.”

The November 29 dip in the market comes after Wall Street’s chief indexes rallied 2% the day before, a rise prompted by the softening line from Fed Chair Jerome Powell, who noted that the policy rate is now “just below” the so-called neutral rate. According to the New York Times, markets took that as a sign that the Fed’s tightening cycle might be coming to a close.

Dollar gains ground ahead of Trump’s G20 meeting with Xi

Powell’s softer tone was also good news for the US dollar, as the greenback recovered against its rivals on November 28.

According to CNBC Money,the dollar index, which measures the value of the greenback against a basket of other major currencies, was last at 96.89, up about 0.4 percent from almost one-week lows.

“If we were to see a significant improvement in the outlook for trade wars over the weekend, that combined with a more dovish Fed would boost risk appetite and we could see a flow back out of dollars into risk assets,” said Jane Foley, a senior currency strategist at Rabobank.

However, few analysts believe that Trump’s G20 meeting with Xi will result in a grand bargain, warning that a prolonged trade war is a more likely scenario.

“It’s our base view that trade wars will continue for some time. On that assumption, risk appetite remains under pressure and the dollar remains on a firm footing,” Foley told CNBC.

Echoing Foley’s forecast, Financial Times notedon November 28, that Larry Kudlow, President Trump’s economic adviser, was already placing the onus on the Chinese side to come up with a solution to the impasse, saying it was up to President Xi Jinping to “step up and come up with new ideas” in order to break the trade deadlock between the world’s two largest economies.