U.S. stocks fell early Friday as investors wrestled with the prospect of further trade clashes with other major economies, following reports that President Donald Trump was likely to push forward with tariffs against China.
Despite the uncertainty, indexes remain close to record levels and they are on track for strong gains for both the week and the month.
Where are the major benchmarks trading?
Futures for the Dow Jones Industrial Average DJIA, -0.02% slipped 16 points to 25,970, a decline of less than 0.1%. S&P 500 index SPX, +0.02% traded less than a point lower to 2,900. Nasdaq Composite Index COMP, +0.25% gained 20 points, or 0.3%, to 8,109.
Major indexes lost ground on Thursday, with the Dow falling 0.5%, the S&P losing 0.4%, and the Nasdaq off about 0.3%. All three put an end to a four-day streak of gains, a rally where both the S&P and the Nasdaq ended at records in each of those sessions.
For the week, the Dow is up 0.8%, the S&P is up 0.9%, and the Nasdaq is up 1.8%. Looking at all of August, the Dow has gained 2.3%, the S&P has risen 3%, and the Nasdaq has climbed 5.4%.
Both the Dow and the S&P are on track for their third straight weekly gain, while the Nasdaq is poised for its second straight positive week. Both the S&P and the Nasdaq are set for their fifth positive month in a row, while the Dow has gained for two straight months.
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What’s driving the market?
Bloomberg on Thursday reported that Trump wants to move ahead with his plan to place tariffs on $200 billion in additional Chinese imports as early as next week. Companies have until Sept. 6 to comment on the proposed duties, and Trump wants to impose the tariffs once that deadline passes.
In the same interview, Trump threatened to withdraw the U.S. from the World Trade Organization and said he’s considering an executive order linking capital-gains taxes to inflation.
The U.S. and Canada are currently in trade negotiations, and are rushing to strike a deal by a Friday deadline set by the Trump administration.
The August Chicago purchasing managers index came in at 63.6, compared with estimates for a reading of 60. Any reading above 50 indicates improving conditions.
A reading of consumer sentiment is due out later.
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The day’s trading is likely to be quiet, as it comes ahead of a three-day weekend for U.S. investors. Markets will be closed on Monday for Labor Day.
What are market analysts saying?
“Although Trump’s plans for imposing duties on $200 billion in Chinese imports are not something new, the fact that he is in a hurry to do so may have weighed on expectations that the two nations could eventually work things out,” said Charalambos Pissouros, senior market analyst at JFD Brokers.
“Last week, low-level talks did not bear fruit, but reports that the two countries are working on a road map that would eventually lead to top-level meetings had been keeping investors’ hopes alive.”
What stocks are in focus?
Coca-Cola Co. KO, -0.20% said it would buy British coffee-shop chain Costa for $5.1 billion. The Dow component is buying the chain from Whitbread PLC WTB, +16.29% Shares of Coke were down 0.3%, while those for U.K.-listed Whitbread were up nearly 17%.
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Lululemon Athletica Inc. LULU, +14.67% late Thursday reported second-quarter earnings that beat expectations. It also raised its full-year outlook. The stock was up 14% on the day and has been a strong performer in 2018, up nearly 100% thus far this year.
American Outdoor Brands Corp. AOBC, +35.72% the parent company of Smith & Wesson, late Thursday reported results that topped analyst expectations. Shares surged by nearly 30%.
Shares of Big Lots Inc. BIG, -9.14% fell 8.2% after the retailer reported its results and gave an outlook.
Ulta Beauty Inc. ULTA, +7.65% late Thursday gave a third-quarter earnings outlook that was below analyst forecasts. Shares of the beauty-products company rose by 8.4%.
Nutanix Inc. NTNX, -2.27% late Thursday forecast a wider-than-expected loss for its first quarter. Shares of the cloud-computing company were off 0.4%.
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