Wall St. set to open lower after China's tough talk on trade
(Reuters) - Wall Street was set to break a three-day winning streak on Friday, as trade worries returned after Chinese media took a hard stance on the tariff dispute between the United States and China.
The trade war will only make China stronger and will never bring the country to its knees, the ruling Communist Party’s People’s Daily wrote in a front-page commentary.
Beijing’s higher tariffs on U.S. products on a $60 billion target list will take effect on June 1, which could prompt Washington to go ahead with tariffs on a further $300 billion worth of Chinese goods.
The two sides are expected to meet in China to resume talks soon.
“Mounting trade worries and geopolitical tensions are weighing on investors nerves,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“The trade war tensions are overcoming the positive in markets so investors are skeptical and markets are caught in a trading range.”
Boeing Co, the single largest U.S. exporter to China slipped 0.7% in premarket trading and Caterpillar fell 1.7%.
Technology companies including iPhone maker Apple Inc and chipmakers, which rely on China for a large portion of their revenue, were also hit by trade fears.
Apple Inc fell nearly 2% also weighed down by Nomura Instinet’s price target cut on its stock, citing headwinds from the tariff war.
The escalating tensions between the world’s two largest economies also led farm equipment maker Deere & Co to cut its full-year forecast. Its shares declined 4%.
All three major indexes have posted gains three days in a row this week as upbeat quarterly results and a batch of strong economic data helped ease worries of a global economic slowdown.
The S&P 500 index is now about 2% away from its record high hit earlier this month.
At 8:11 a.m. ET, Dow e-minis were down 213 points, or 0.82%. S&P 500 e-minis were down 22.75 points, or 0.79% and Nasdaq 100 e-minis were down 79.75 points, or 1.05%.
Shares of Micron Technology Inc, Broadcom Inc and Intel Corp fell between 1% and 2%.
Applied Materials Inc gained 4.1% after the chip gear maker’s upbeat third-quarter profit eased concerns about waning chip demand.
Online scrapbook company Pinterest Inc slumped 16.1% after the recent Wall Street debutant forecast 2019 revenue broadly in line with Wall Street targets.
Under Armour Inc rose 3.4% after JP Morgan upgraded the sports wear maker to “overweight” from “neutral”.
Also on investors watch is the debut of Luckin Coffee Inc, the Chinese challenger to Starbucks Corp.
Reporting by Amy Caren Daniel and Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta