US pre-open: Stocks seen lower as investors mull Sino-US relations, earnings
US stocks looked poised for a weaker open on Friday as investors mulled over the latest developments in Sino-US relations, with chip makers likely to see some pressure following disappointing earnings from Nvidia.
At 1215 GMT, Dow Jones Industrial Average and S&P 500 futures were down 0.4% and 0.5%, respectively, while futures of the tech-heavy Nasdaq suffered the brunt of the losses, down 1.1%.
Relations between the US and China were firmly on investors' minds after a White House official told Reuters on Thursday that China's written response to US demands for trade reform were unlikely to lead to a deal in the near future.
Meanwhile, investors were also likely to be keeping an eye on Brexit developments across the pond again amid reports that Theresa May could face a vote of no confidence as early as Tuesday. Hardline Brexiteer Jacob Rees-Mogg submitted a letter of no-confidence in May as leader of the Tory Party on Thursday and it looked as though the 48-letter threshold needed to trigger a vote would be reached by the end of Friday.
On the corporate front, chip makers could be a drag after Nvidia's third-quarter earnings late on Thursday missed on revenue, with revenue guidance for the fourth quarter below expectations. The shares plunged 18% in pre-market trade.
Russ Mould, investment director at AJ Bell, said: "Cult, US-listed stock Nvidia, a firm often bracketed with the better-known FAANG stocks, has blown a massive fuse overnight and left growth-seeking momentum investors in an invidious position.
"The leading manufacturer of silicon chips has issued a big profit warning for the final quarter of its financial year (the three months to the end of January), citing indigestion in the video consoles market and also a slowdown in demand from makers of Bitcoin mining equipment.
"As a result, a stunning run of increases in quarterly sales and profits is about to come to a crashing end, with founder and chief executive Jensen Huang forecasting a 7% year-on-year drop in sales and a 28% year-on-year plunge in operating profit for the fourth quarter."
Elsewhere, Williams-Sonoma was down 13% after the retailer's third-quarter revenues missed expectations, while department store chain Nordstrom was under the cosh after saying in its quarterly earnings that it wrote down $72m in credit card refunds to customers who were incorrectly charged higher interest rates.
On the upside, PG&E shares surged nearly 40% in pre-market trade following a report that a regulatory official told investors the agency does not want the utility to go into bankruptcy if it's found to have been responsible for this month's wildfire in northern California.
Sonos rallied ahead of the opening bell as the consumer electronics company's fourth-quarter earnings impressed investors.
Intel was likely to be in focus after its board approved a $15bn share buyback, while Viacom shares could be active after the release of its fourth-quarter numbers.