Stock futures fell on Thursday, tracking losses for Asian equities, as trade tensions ramped up after U.S. President Donald Trump threatened tariff retaliation on China, which he claims “broke the deal”.
How are the benchmark indexes faring?
Dow Jones Industrial Average futures YMM9, -0.68% fell 119 points, or 0.5%, to 25,896, while S&P 500 futures ESM9, -0.73% dropped 12.95 points, or 0.5%, to 2,874.50. Nasdaq-100 NQM9, -0.93% futures slid 45.25 points, or 0.6%, to 7,601.75.
Stocks fell toward the closing bell on Wednesday. The Dow Jones Industrial Average DJIA, +0.01% stood out with a gain of 2.24 points to 25,967.33, but the S&P 500 SPX, -0.16% fell 0.2% to 2,879.42, while the Nasdaq Composite Index COMP, -0.26% dropped 0.3% to 7,943.32.
The week so far has seen all three major indexes drop by at least 2%. Tuesday marked a particularly tough session for stocks, with the Dow suffering its biggest percentage drop since Jan. 3.
Read: The stock market is on pace for its worst month since December rout
What’s driving the market?
With investors already on edge over trade talks, due to begin in Washington on Thursday, comments from Trump at a rally in Florida on Wednesday evening appeared to rattle them anew. “You see the tariffs we’re doing? Because they broke the deal. They broke the deal,” Trump said. “They can’t do that, so they’ll be paying.”
Concerns that the U.S. and China would struggle to reach an agreement have been dogging markets since Sunday, when Trump voiced frustration over the pace of talks in a tweet. He said the U.S. would increase tariffs by Friday on $200 billion worth of Chinese goods to 25% from 10% — a threat that has been backed up by the White House all week.
And China indicated that it wouldn’t such action lying down. “China deeply regrets that if the U.S. tariff measures are carried out, China will have to take necessary countermeasures,” said the Commerce Ministry in a statement, without providing specific details, according to the AP.
The rift has come amid accusations by the U.S. that China has been trying to back out of already agreed measures, prompting Trump to slap higher tariffs on the country. China has taken a tougher stance on negotiations because officials believed the U.S. was ready to compromise, based on recent actions and comments by Trump, The Wall Street Journal reported.
See: How U.S.-China trade uncertainty could trigger a stock-market buy signal
Read: ‘China has chosen to retreat’—the U.S. view as negotiations reach critical juncture
Read: With Trump threatening to tighten the trade screws, here’s a look at what tariffs have done so far
Beijing’s top trade envoys, including Vice Premier Liu He, will head to Washington on Thursday to resume negotiations. But a tweet late Wednesday by Hu Xijin, the editor in chief of China’s Global Times, said those officials are going simply because they were invited. The tabloid is published by the Ruling Communist Party’s People’s Daily.
The Chinese delegation is at the airport and will take off soon. Some ask why bother to go to the US for talks given what had happened?This is also a question for the US side, why still bother to invite the Chinese delegation? I want to emphasize 'invitation'.
— Hu Xijin 胡锡进 (@HuXijin_GT) May 9, 2019
Elsewhere, Federal Reserve Chairman Jerome Powell is due to give “brief opening remarks” at the Fed’s community development research conference at 8:30 a.m. Eastern Time. Chicago Fed President Charles Evans will give a speech at that same event at 1:15 p.m. Eastern, and Atlanta Fed Raphael Bostic will appear at the Louisiana Bankers Association convention in New Orleans at 10:45 a.m. Eastern.
As for data, weekly jobless claims, the March trade deficit and producer prices for April are all due at 8:30 a.m. Eastern. Wholesale inventories for March are due at 10 a.m. Eastern.
How are other markets trading?
In Asia, trade tensions rattled markets, with the Hang Seng Index HSI, -2.17% down 1.9%, and the Shanghai Composite Index SHCOMP, -1.44% off 1%. European stock futures pointed to a weaker open for those markets.
Gold GCM9, +0.21% was modestly higher, while the U.S. Dollar Index DXY, -0.04% slipped against the Japanese yen USDJPY, -0.25% perceived by investors as a haven investment. Crude oil CLM9, -1.01% slipped.
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