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S&P 500 inches into the red, ending five day winning streak

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Stocks slipped on Wednesday, reversing gains late in trading as Wall Street fell short of extending its winning streak to six days. Gains earlier in the session were kept in check while investors digested weak earnings from shipping giant FedEx.

The S&P 500 and the Dow Jones Industrial Average traded slightly lower, falling 0.04% and 0.1%, respectively. The former fell to 3,191.14 points while the latter ended the day down 27.88 points at 28,239.28 points.

Both the S&P 500 and Nasdaq Composite hit intraday all-time highs, with the latter index the only one of the three ending higher, up just 0.05% at 8,827.74 points.

The S&P 500's slip ended its winning streak at five days, the longest consecutive run of gains since November.

Wall Street's streak came after President Donald Trump and Chinese officials announced that the world's two largest economies had agreed on a so-called "phase one" deal.

Traders work after the opening bell at the New York Stock Exchange (NYSE) on August 5, 2019 at Wall Street in New York City.
Johannes Eisele | AFP | Getty Images

"The U.S. and China move steadily but slowly in making progress on a trade deal but progress is consistently perceived to take place," said strategists at MKM Partners in a note. Because of this, "we see the U.S. likely continuing to outperform."

It is understood that Beijing agreed to billions of dollars in agricultural purchases from the U.S., while Trump said he would not move ahead with a new round of planned tariffs, among other items. The deal, which is not yet signed, is set to be confirmed in the first week of January, according to U.S. Trade Representative Robert Lighthizer.

To be sure, the two sides still have key structural issues to resolve before putting an end to the trade war. Those concerns are likely to be addressed in a "phase two" trade deal.

"We think trade is going to be an ongoing soap opera," said Frank Rybinski, chief macro strategist at Aegon Asset Management. "But for now, it's good enough to give some relief to the markets." He said the firm expects stocks post mid-single-digit gains in 2020 after a blistering performance this year.

The S&P 500 has rallied more than 27% year to date and is on pace for its biggest one-year gain since 2013. The Dow and Nasdaq have surged in 2019 by 21% and 33%, respectively.

But the major averages struggled to post gains on Wednesday after FedEx shares dropped more than 9% on disappointing quarterly numbers. The company's earnings and revenue missed analyst expectations. FedEx also cut its guidance for the rest of its fiscal year.

FedEx cited weaker economic conditions across the globe and losing a "large customer."

"We anticipate some of the aforementioned headwinds to abate and F2H20 to be a period of moderate improvement," said Oppenheimer analyst Scott Schneeberger in a note. "However, with Express/Ground margins well below historical trend, we anticipate FedEx to be a "show me" story for multiple quarters."

In other corporate news, General Mills shares climbed 1.9% after the company posted a quarterly profit that topped analyst expectations. General Mills also reaffirmed its fiscal year earnings outlook.

—CNBC's Sam Meredith contributed to this report.