Stock futures rise on hint of tariff concessions

[July 05, 2018]   By Sruthi Shankar

(Reuters) - U.S. stock index futures ticked higher on Thursday, as signs that Washington may ease back on plans for tariffs on European cars pushed automakers higher across the board, offsetting further signs of tension with China.

An industry source told Reuters on Thursday that the U.S. ambassador to Germany had told German car bosses President Donald Trump could abandon his threatened tariffs in exchange for concessions.

Shares of European automakers rose, with New York-listed shares of Fiat gaining 6.0 percent in premarket trading. Ford climbed 0.9 percent and General Motors rose 1.6 percent.

The Trump administration's tariffs on $34 billion of Chinese imports are due to go into effect at 0401 GMT on Friday and Beijing said it would respond in equal measure on U.S. goods ranging from cars to soybeans the instant U.S. measures go into effect.

Trump has threatened to escalate tariffs to as much as $450 billion worth of Chinese goods if China retaliates. Beijing warned on Thursday it would respond the instant U.S. measures go into effect.

Amidst the tensions, a Chinese court earlier this week temporarily barred U.S. chipmaker Micron Technology from selling its main products in the country. Micron's shares, down along with many of its peers on the first signs of that decision before the 4th of July holiday, dropped another 0.6 percent in premarket.

The escalating trade dispute between the world's largest two economies have roiled financial markets since early March, reducing the S&P 500's gains for the year to just 1.5 percent, and pushing the Dow Jones Industrial Average into negative territory.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 28, 2018. REUTERS/Brendan McDermid

At 7:37 a.m. ET, Dow e-minis were up 160 points, or 0.66 percent. S&P 500 e-minis were up 18.25 points, or 0.67 percent and Nasdaq 100 e-minis were up 53.5 points, or 0.76 percent.

The U.S. Federal Reserve is also set to release minutes from its June 12-13 policy meeting at 2:00 p.m. ET, where it raised interest rates for a second time this year and flagged that more are likely.

Market participants, while looking for clues on the U.S. central bank's thinking on monetary policy and inflation, will also be hoping for signs of improvement in private sector job numbers.

The ADP National Employment Report, due at 8:30 a.m. ET, is expected to show private employers added 190,000 jobs in June versus an increase of 178,000 in May. That comes ahead of the more comprehensive non-farm payroll report on Friday.

(Reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham)
 

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