Policy watchers are skeptical there will be a deal on trade between U.S. President Donald Trump and Chinese President Xi Jinping later this month, with some suggesting Trump’s Thursday tweet about “a very good conversation” may be aimed at influencing next week’s midterm elections.

The S&P 500 index fell as much as 0.8 per cent in late-morning trading in New York, erasing earlier gains. The technology-heavy Nasdaq 100 dropped as much as 1.8 per cent.

Here’s a sample of what analysts are saying:

Compass Point, Isaac Boltansky, via email

“The underlying issues driving the China/U.S. trade tensions are incredibly complicated and contentious, which makes it difficult for me to see how a single phone call changes the paradigm.”

“At best, this call shows that the White House is willing to negotiate about negotiating. At worst, this is little more than a gambit aimed at goosing the market in the hopes that it helps at the polls next week.”

“There is no reason to believe that there will be a speedy resolution to the China/U.S. trade tensions. In fact, I think that if Democrats win next week, the president is likely to pivot back to his core issues and China trade pessimism could return just as quickly as it abated.”

Veda Partners, Henrietta Treyz

Reports of a “ceasefire” with China may be aimed at “the president’s voter base in bread-basket states – those farmers who have been the front line of casualties in the trade war.” Though it’s possible Trump could drop all but the smallest of his demands, “that is entirely inconsistent with the statements and actions President Trump and his administration have made for two years.”

Treyz notes that “the Republican party remains united behind the President and his hard-liner approach to China.” Veda sees a 15 per cent chance Trump will “decide to abandon his long-held global beliefs about China or that President Xi, who has been elected to office for life, would capitulate” enough to call off the trade war entirely.

Horizon Investments, Greg Valliere, via email

“There’s no imminent deal. This is pre-election hype designed to keep the markets happy. Atmospherics look a little better, however. ”

Cowen, Chris Krueger

Watch what Trump “does, not says,” Krueger advises in a note. “Did they actually have a great talk? Perhaps. Did Trump drop a Tweet in hopes of an equity market pop before the midterms? Perhaps.”

“There is good reason to be skeptical of this Kumbaya moment,” Krueger says, listing Trump administration actions punishing China, including: Vice President Mike Pence’s speech last month -- which Cowen sees “as a turning point, announcing a new great-power confrontation strategy;" restricting exports to Fujian Jinhua; Chinese intelligence officers being charged by the Justice Department with stealing airline engine technology; leaks suggesting Trump was willing to move forward with additional tariffs; Justice Department charges against Chinese and Taiwanese companies and individuals for stealing Micron Technology trade secrets, and Attorney General Jeff Sessions announcing an initiative to counter Chinese cyber attacks and corporate spying.

MUFG, Chris Rupkey

“What happened to the battle with China over supremacy and worldwide domination, forced technology transfer, noneconomic licensing agreements, cyberwar, deleterious trade agreements ripping off America for years? Gone, poof!”

Rupkey flags recent polling showing “the China trade battle is going nowhere with voters,” while hopes for a pact may boost the “downtrodden stock market too.”

Pimco, Gene Frieda

"When you look at the nature of the dispute, it’s very unlikely we get a major breakthrough anytime soon," Frieda, global strategist at Pacific Investment Management Co. in London, says on Bloomberg Television.