U.S. stock futures dropped on Friday as the U.S. government stepped up its trade war with China and reportedly waged another round of tariffs on up to $100 billion of Chinese products.
How are markets performing?
Futures for the Dow Jones Industrial Average
YMU8, -0.56%
fell 144 points, or 0.6%, to 25,066, while those for the S&P 500 index
ESU8, -0.39%
lost 11.90 points, or 0.4%, to 2,776.50. Futures for the Nasdaq-100 index
NQU8, -0.24%
gave up 20.50 points, or 0.3%, to 7,290.75.
The indicated losses come after markets closed mixed on Thursday, with the Dow
DJIA, -0.10%
ending 0.1% lower while the S&P 500 index
SPX, +0.25%
climbed 0.3% and the Nasdaq Composite Index
COMP, +0.85%
rallied 0.9% to close at a record.
What is driving the markets?
The losses on Friday morning came after a Reuters report said that the U.S. is getting ready for a second wave of tariffs on China, having nearly finished a list of levies on $100 billion worth of Chinese goods.
The report comes after U.S President Donald Trump reportedly approved the first round of $50-billion tariffs on Chinese goods, although it wasn’t clear when the move would take effect. Beijing responded to the approval by saying it will impose levies of its own on $50 billion in U.S. products. When the two waves of U.S. duties will come into effect has not been outlined.
U.S. traders largely ignored the latest rate decision from the Bank of Japan. The Japanese central bankers stuck to its easing policy, keeping short-term interest rate at minus 0.1% and its target for the yield on 10-year government bonds at around 0%. The decision comes just a day after the European Central Bank said it plans to ends its quantitative easing program in December, but will keep rates at record lows at least until after next summer.
What are strategists saying?
“An expected announcement on the Trump administration’s list of $50 billion of Chinese goods imported into the U.S. and targeted for higher tariffs is on the horizon on Friday. China’s response will be awaited; the trade war saga might receive a new chapter, diverting funds into perceived safe-haven assets to the detriment of riskier ones,” said Andreas Georgiou, investment analyst at XM, in a note.
What’s on the economic calendar?
The Empire State index for June, a regional economic snapshot from the New York Federal Reserve, is due at 8:30 a.m. Eastern Time, followed by industrial production and capacity utilization for May at 9:15 a.m. The consumer sentiment index for June is on the docket at 10 a.m.
In Federal Reserve speakers, Dallas Fed President Rob Kaplan will appear in a moderated discussion at a Fort Worth Chamber of Commerce lunch at 1:30 p.m. Eastern.
Stock movers
Shares of AT&T Inc.
T, +0.93%
added 0.6% ahead of the bell after news late Thursday it completed its takeover of Time Warner Inc.
TWX, +0.84%
. Time Warner shares advanced 1.8%.
What are other markets doing?
Asian markets closed mixed, with Chinese
SHCOMP, -0.73%
and Hong Kong
HSI, -0.43%
stocks in the red as investors there mulled the increased risks of a trade war.
Stocks in Europe were mixed, as the euro
EURUSD, +0.2161%
rebounded from its selloff on Thursday.
The ICE U.S. Dollar Index
DXY, -0.08%
was down 0.1% at 94.723.
Oil prices
CLN8, -0.28%
and gold
GCQ8, -0.47%
were both lower.
Source : MTV
