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Wall Street set to open lower as trade war fears weigh

Kitco News

(Reuters) - U.S. stocks were set to open lower on Tuesday, weighed down by fears over the escalating trade spat between the United States and China.

President Donald Trump on Friday threatened duties on $267 billion of goods on top of planned tariffs on $200 billion of Chinese products. China has vowed to respond if the United States took any new steps on trade.

China has also decided to approach the World Trade Organization next week for permission to slap sanctions on the United States, for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.

“The pressure point today clearly seems to be about trade more than anything else. China’s been playing such a long game and none of that has been good for the markets,” said Art Hogan, chief market strategist at B. Riley FBR in New York.

“Today feels like the day we were expecting yesterday, but the WTO complaint has been stirring up this escalation, which has reignited our concerns about trade in general.”

Shares of trade-sensitive Caterpillar (CAT.N) and Boeing (BA.N) dropped nearly 1 percent in premarket trading, the most among Dow Industrials .DJI trading premarket.

Boeing earlier raised its estimate for purchase of new planes by China over the next two decades by 6.2 percent.

Shares of chipmakers, which rely on China for a major portion of their revenue, also fell. Intel (INTC.O), Micron (MU.O) and Nvidia (NVDA.O) were down between 0.6 percent and 1.5 percent.

At 8:43 a.m. ET, Dow e-minis 1YMc1 were down 111 points, or 0.43 percent. S&P 500 e-minis ESc1 were down 7.25 points, or 0.25 percent and Nasdaq 100 e-minis NQc1 were down 24.25 points, or 0.33 percent.

Also in focus was Hurricane Florence, now a Category 4 storm that is expected to grow stronger before making landfall on Thursday, most likely in southeastern North Carolina near the South Carolina border.

Insurers fell for the second straight day on the storm warning with Travelers (TRV.N) down 0.5 percent, Progressive Corp (PGR.N) 0.9 percent and American International Group (AIG.N) 0.9 percent.

However, home improvement chains Lowe’s Companies (LOW.N) and Home Depot (HD.N), whose shares hit record highs on Monday, were up roughly 1 percent each.

Nike (NKE.N) rose 0.9 percent after brokerage Canaccord Genuity upgraded the world’s No.1 sportswear maker’s shares, citing that the company has regained its footing and is solidly marching back to top form.

Integrated Device Technology (IDTI.O) jumped 11.5 percent after Japan’s Renesas Electronics (6723.T) agreed to buy chipmaker in a $6.7 billion deal to deepen its push into semiconductors for self-driving cars.

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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