The U.S. market is giving more weight to trade negotiations than it is to interest rates right now. 

That dynamic allows us to understand the broader market, specifically everyone's favorite stock to follow: Apple (AAPL - Get Report) . 

The News

President Trump told CNBC, "No, I don't think I need it [a trade deal] before the election." He also mentioned he doesn't necessarily need to make a partial agreement either, highlighting his unpredictability on the trade front, as he'd recently mentioned, he'd consider a partial agreement. 

The S&P 500 fell 0.34%, with the other two major indices falling as well. The 10-year treasury yield inched downward to 1.738%, although the yield curve inversion didn't worsen much, with the 3-month treasury yield falling ever so slightly to 1.9%. 

What This all Means

The U.S. stock market is giving more weighting to the U.S. and China trade conflict than it is to interest rates for the moment. 

Last week, the S&P 500 rose 0.57% on optimism a trade deal would get done, even though the removal of multiple sources of economic drag lowered the probability of a third interest rate cut from the Federal Reserve (80% to now 55%). Friday stocks rose on the thought there won't soon be a trade agreement, an outcome that would raise the likelihood of that rate cut. 

Independent of the most recent trade headlines, the Federal Reserve has grown more cautious on a third 2019 rate cut. The Boston Federal Reserve President Eric Rosengren said at an New York University event Friday another interest rate cut would create excesses in both household finances and prices of some risk assets. 

But if the trade war escalates -- and there are tariffs set to go into effect on consumer electronic goods coming into the U.S. in December -- the case for another cut certainly would not weaken. 

Many on Wall Street have said an escalation of the trade could outweigh the positive impact of lower rates, which would "support" equity prices, rather than outright boost them. 

What It Means for Apple

Anyone wondering why Apple shares were falling 0.95% to $218.87 a share Friday, even though the new iPhone 11's were selling well? 

First off, the new 11's had a great day, with a long line reportedly outside the flagship New York City 5th Avenue Apple store. Apple is getting it right on pricing, especially in the competitive smartphone market in China. "Especially with lower priced competition across the board, the price cut this time around was a smart strategy for Apple that is already paying dividends with many Chinese consumers looking at iPhone 11 as the right phone/price points," wrote Wedbush Securities analyst Dan Ives in a note Friday. He now expects more than 185 million units sold in 2020 "based on the initial demand trajectory out of the gates." 

Not only does this provide a marginal boost to Apple's hardware business, but it means it can easily maintain its installed base, so precious to its plans to sell new services. 

But an unresolved trade conflict means tariffs on smartphones in December, which could shave 1% to 11% off of Apple's 2020 earnings per share, depending on whether it passes the higher cost onto consumers. 

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