US pre-open: Stocks to drop ahead of data slew; Turkey ramps up US spat
US stocks looked set for a weaker open on Wednesday ahead of a raft of economic data and as investors continued to keep an eye on developments between the US and Turkey.
At 1210 BST, Dow Jones Industrial and S&P 500 futures were down 0.6%, while Nasdaq futures were 0.7% weaker.
The Turkish lira was gaining ground against the dollar after the country announced that it will implement retaliatory tariffs on a range of US products including autos, tobacco and alcohol.
CMC Markets analyst Michael Hewson said: "This morning’s escalation by Turkey in slapping huge tariffs on US goods from rice, to cars to alcohol is unlikely to be well received by the US administration as they attempt to secure the release of their citizen. President Trump’s reaction could well come by way of tweet later today.
"Turkish President Erdogan appears to be playing a dangerous game if he thinks he can come out on top in this spat with the US. Notwithstanding the fact that tariffs are always inflationary they will only increase the concerns of Turkish business who want the central bank to start getting to grips with the runaway inflation in the Turkish economy. They will also increase the downward pressure on the lira, in turn causing greater pain to those Turkish corporates who have currency denominated loans."
Meanwhile, mining shares could weigh on markets when trading gets going later on the back of a stronger dollar and falling metals prices. A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies.
"A stronger dollar spells bad news for miners, affecting not only commodity prices but also companies’ outgoings. However, the market may be overreacting to the current dollar strength as this will also translate into higher earnings along the line," said Fiona Cincotta, senior market analyst at City Index.
In corporate news, electric car maker Tesla was likely to be in focus yet again following a Bloomberg report that chief executive Elon Musk had not officially hired Goldman Sachs as its financial adviser when he tweeted his plans to take the company private last week and said he had secured deal funding.
Elsewhere, MoviePass owner Helios & Matheson Analytics was set to tumble at the open after it reported a wider loss for the second quarter.
Still to come, department store Macy's is due to report earnings. On the data front, the NY Empire State manufacturing index for August is at 1330 BST, along with retail sales for July, while industrial production figures for July are at 1415 BST and business inventories and the NAHB housing market index are at 1500 BST.