US pre-open: Stocks to drop as trade war worries sour mood
US stocks looked set for losses at the open on Friday as relations between the US and China soured again, renewing fears of a trade war.
At 1225 BST, Dow Industrial Average futures were down 0.6%, while S&P 500 and Nasdaq were 0.4% and 0.3% lower after China vowed to retaliate quickly following news that US President Trump has approved $50bn worth of tariffs on the import of goods from China.
The approval followed a 90-minute meeting on Thursday of Senior White House officials, national-security officials and senior representatives of the Treasury, Commerce Department, and US Trade Representative’s Office.
A formal announcement is expected to be made later in the day by the US Trade Representatives, with a notification in the Federal Register in the coming week.
Sentiment took a hit after Chinese Foreign Ministry spokesman Geng Shuang said: "If the United States takes unilateral, protectionist measures, harming China's interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights."
David Morrison, senior market strategist at GKFX, said that concerns about rising trade tensions come on top of the quarterly expiry of US stock index futures and options - something that can often lead to a spike in volatility.
Meanwhile, IG analyst Joshua Mahony said: "Trump is clearly used to getting things his own way, yet with his decision to fight on all fronts on trade, we are essentially seeing him bet the house on the notion that the likes of China, the EU and Canada will eventually cave in to his demands."
On the corporate front, AT&T shares looked set for gains following news a day earlier that it completed a takeover of Time Warner.
On the macroeconomic calendar, the New York Empire State manufacturing index is at 1330 BST, while industrial production and capacity utilisation are at 1415 BST and the Michigan consumer sentiment index is at 1500 BST.