(Reuters) – U.S. stocks were set to dip at the open on Tuesday after rallying strongly last week, as investors focused on the latest round of trade talks between the United States and China.

Hopes that the two countries will hammer out a deal to end their protracted trade war helped the S&P 500 and the Nasdaq log their best week in a month on Friday.

Both sides have said progress has been made, but few details have emerged from the talks so far. Trade negotiations are set to take place in Washington later in the day and will be followed by higher-level talks on Thursday.

“We had a fairly good rally on Friday and there is a hint of profit-taking before the resumption of the trade talks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Investors are cautious but the hope factor is still alive in the markets, which is what stocks rallied on last week.”

In a bright spot, big-box retailer Walmart Inc climbed 3 percent in premarket trading after reporting an estimate-beating jump in holiday quarter comparable sales, helped by higher consumer spending and more e-commerce purchases.

Shares of fellow retailer Target Corp gained 0.9 percent, while Macy’s Inc rose 0.5 percent.

Walmart’s results follow a shockingly weak Commerce Department report last week that showed U.S. retail sales recorded their biggest drop in more than nine years for December, stoking fears of an economic slowdown.

With nearly 80 percent of S&P 500 companies having reported earnings reports so far, analysts now see a profit increase for the group of 16.2 percent for the fourth quarter, according to Refinitiv data.

However, the current quarter does not look all that upbeat, with earnings expected to fall by 0.5 percent, their first year-on-year decline since mid-2016.

At 8:37 a.m. ET, Dow e-minis were down 62 points, or 0.24 percent. S&P 500 e-minis were down 8.5 points, or 0.31 percent and Nasdaq 100 e-minis were down 21 points, or 0.3 percent.

Tariff-vulnerable industrial companies such as Boeing Co dropped 0.3 percent and Caterpillar Inc 0.1 percent.

Medtronic Plc rose 2.4 percent after the medical device maker beat analysts’ estimates for quarterly profit on higher sales in its surgical products unit and restorative therapies group.

Intercept Pharmaceuticals Inc shares soared 26.3 percent after the biopharma company said its treatment for patients with liver fibrosis due to a progressive fatty liver disease met one of the main goals in a late-stage study.

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