(Reuters) – U.S. stock index futures fell on Thursday, after President Donald Trump ratcheted up trade tensions with China ahead of a high-stakes negotiation.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 8, 2019. REUTERS/Brendan McDermid
Trump vowed not to back down on imposing new tariffs on Chinese imports unless Beijing “stops cheating our workers”, even as a Chinese delegation is set to hold talks in Washington on Thursday and Friday to salvage a trade deal.
China has threatened to retaliate if tariffs on $200 billion worth of Chinese goods increase to 25% on Friday, rekindling worries of a global economic slowdown and pushing investors to seek safety in assets such as government bonds and the Japanese yen.
The S&P 500 is set to extend a three-day losing streak that has pulled it 2.6% below the record high of 2,954.13 hit last week.
Trade-sensitive industrial bellwethers Boeing Co and Caterpillar Inc dropped 0.7% in premarket trading on Thursday.
At 7:11 a.m. ET, Dow e-minis were down 163 points, or 0.63%. S&P 500 e-minis were down 18.25 points, or 0.63% and Nasdaq 100 e-minis were down 59.25 points, or 0.77%.
Chipmakers such as Micron Technology Inc, Advanced Micro Devices Inc and Nvidia Corp fell between 1.2% and 2.5%. The broader Philadelphia Semiconductor index has declined almost 5% so far this week.
The sector, which is heavily reliant on China for revenue, was also pressured by a modest profit growth forecast from Intel Corp.
In a bright spot, Tapestry Inc jumped 12.7% after the company beat quarterly profit estimates and announced a $1 billion share buyback program.
On the data front, a report from the Commerce Department at 8:30 a.m. ET, is expected to show trade deficit having widened to $50.2 billion in March from $49.4 billion in February.
The Labor Department is scheduled to release producer price index for final demand, which is expected to have edged up 0.2% in April after rising 0.6% in March.
Reporting by Shreyashi Sanyal and Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila