US stocks index futures fell on Tuesday as concerns over employing tariffs on nearly all Chinese goods by the US kept investors on edge.
Shares of trade-sensitive Caterpillar Inc. were down 0.5 percent to $141.27, while Boeing Co. added 0.2 percent to $342.61. The planemaker has adjusted its estimate for acquisition of new planes by China for the next couple of decades by 6.2 percent.
Chipmakers, which depend on China for a large part of their revenue, were also in the red. Intel Corp. slipped 0.7 percent to $45.98, while Micron Technology Inc. stumbled 4 percent to $43.08 and NVIDIA Corp. dropped 0.4 percent to $273.47.
Chief market economist Peter Cardillo stated that the futures were pointing to a weak opening as geopolitical, trade issues continue to weigh on markets.
Would expect another trying directionless market as investors stay cautious, he added.
US equities on the other hand, started the week on a positive note with the S&P 500 gaining 0.07 percent to $2,878.92. Tech-heavy NASDAQ Composite index cut a four-day losing streak and last stood 0.2 percent higher to $7,924.16.
Dow 30 advanced 0.1 percent to $25,882.78, while S&P 500 e-minis shed 0.02 percent to $2,879.75. Nasdaq 100 e-minis was up 0.2 percent to $7,475.75.
China Seeks WTO’s Help for Sanctions on the US
Weakness in US stock markets came after President Donald Trump on Friday said he was ready to tax $267 billion of Chinese products which would follow planned duties on $200 billion of Chinese imports in several industries, including technology.
The proposed tariffs would bring overall imports from China subject to tariffs to over $500 billion, which is almost the same amount as the $505 billion in products that the US imported from China in 2017.
Trump’s comments left a 100-point fall in the Dow Jones Industrial Average, with the apparent escalation in the trade tensions with China. S&P 500 and the NASDAQ Composite also experienced losses on Friday.
China has warned that it would resort to retaliatory measures if the US goes on with the new duties. The world’s second-largest economy has decided to seek the help of the World Trade Organization (WTO) to implement sanctions on the US, following Trump’s recent statement.
China’s WTO request cites Washington’s non-compliance with a decision in a conflict over US dumping duties. The US method of calculating the amount of dumping, which refers to Chinese exports that are priced to undercut American-made products on the US market, was determined to have been illegal.
The matter is likely to result to years of legal battle over the case for sanctions. The country will ask for consent at a special meeting of the WTO’s Dispute Settlement Body on September 21.
Businesses have been anticipating when the next round of $200 billion in tariffs would start, with several companies expecting an announcement on Friday.
The public had until Thursday to comment on the administration’s proposal. The question regarding whether the new tariff will be set at 10 percent or 25 percent has not been clarified so far.
FSMNews provides you the latest happenings on the market. Subscribe now to FSMNews and get up to date information on forex, commodities, stock s, technology, economy and a lot more.