Stock futures fell sharply on Thursday, amid investor concern that trade tensions between the U.S. and China could get much worse before they improve.
How are the major benchmarks trading?
Dow Jones Industrial Average futures YMM19, -0.97% fell 261 points, or 1%, to 25,510, while S&P 500 futures ESM19, -0.99% fell 18.40 points, or 0.6%, to 2,839. Nasdaq-100 futures NQM19, -1.38% were the hardest hit, dropping 107.25 points, or 1.5%, to 7,322.50.
On Wednesday, the Dow Jones Industrial Average DJIA, -0.39% was down 100.72 points, or 0.4%, to 25,776.61 and the S&P 500 index SPX, -0.28% fell 8.09 points, or 0.3%, to 2,856.27. The Nasdaq Composite Index COMP, -0.45% slipped 34.88 points, or 0.5%, to 7,750.84.
What’s driving the market?
Amid this week’s increasing trade tensions — especially surrounding the technology sector — investors are beginning to adjust to the idea of a protracted standoff between the U.S. and China. U.S. tech stocks led losses on Wednesday, and Asia picked up the baton on Thursday.
Read: Trade standoff between U.S., China may be settling in for the long run
Taiwan’s tech-heavy stock index fell amid losses for chipmaking giant Taiwan Semiconductor Manufacturing TSM, -1.02% 2330, -3.36% a supplier for Huawei Technologies Co. Asian tech weakness came after The Wall Street Journal reported U.K.-chip design company Arm Holdings was halting business with Huawei.
Trade talks can only continue when the U.S. adjusts its “wrong actions,” Gao Feng, spokesperson for China’s Ministry of Commerce, reportedly said Thursday in a briefing, according to translated remarks. He added that the U.S. crackdown on China companies is threatening the “global industrial and supply chain.”
Meanwhile, the South China Morning Post reported that tensions are forcing China to rethink its entire economic relationship with the U.S.. That’s as Huawei, meanwhile, is reportedly exploring the development of its own operating system if it can’t access that of Alphabet’s GOOGL, +0.12% Google or Microsoft Corp. MSFT, +0.61%
Stocks on Wednesday failed to get a lift from the minutes of the Federal Open Market Committee’s latest meeting, which revealed interest rates are expected to remain steady “for some time.”
Investors will get a handful of economic updates on Thursday, starting with weekly jobless claims due at 8:30 a.m. Eastern Time, followed by the Markit manufacturing and services purchasing managers indexes for May due at 9:45 a.m. Eastern. New home sales for April are due at 10 a.m. Eastern.
What are analysts saying?
“The prospect of a speedy conclusion to the current tensions between the U.S. and China continues to recede, and as such the caution of the last few days, runs the risk of turning into a full-blown retreat from those sectors that are likely to be hit the hardest, from further escalations,” said Michael Hewson, chief market analyst at CMC Markets, in a note to clients.
How are other markets trading?
Asian stocks had a mostly losing session, with losses climbing for Shanghai Composite SHCOMP, -1.36% which fell 1.4%. European stocks SXXP, -1.52% were all down at the start of trading.
Among commodities, crude prices US:CLU8 also fell sharply, while gold GCM19, +0.19% inched up and the U.S. dollar DXY, +0.17% DXY, +0.17% DXY, +0.17% DXY, +0.17% was higher, notably against the British pound GBPUSD, -0.1975%
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https://www.marketwatch.com/story/us-stock-futures-drop-as-china-trade-spat-continues-to-unsettle-investors-2019-05-23
2019-05-23 10:23:00Z
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