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The United States increased duties to 25% on
$200 billion worth of Chinese goods and President Donald Trump
said he would start the "paperwork" on Friday for 25% duties on
another $325 billion in Chinese imports.
But even as Beijing threatened retaliation, negotiators in
Washington agreed to stay on for a second day, encouraging
investors that eventually a deal would be reached.
"Investors will be watching closely to see if any deal can be
reached, but may have to prepare for more volatility in the
event that one isn't reached," said Mihir Kapadia, chief
executive office and founder of Sun Global Investments.
S&P 500 futures fell 0.6% when the additional tariffs went into
effect shortly after midnight.
The spike in tensions this week has triggered a flight to safety
and triggered a 2.5% drop in the S&P 500 so far this week,
setting the benchmark index to post its worst weekly decline
since December.
At 6:29 a.m. ET, Dow e-minis were down 13 points, or 0.05%. S&P
500 e-minis were down 5.25 points, or 0.18% and Nasdaq 100
e-minis were down 5.25 points, or 0.07%.
Amid market uncertainty, ride-hailing company Uber Technologies
Inc is set to make its market debut after raising $8.1 billion
in the largest U.S. IPO since 2014.
Symantec Corp's shares plunged 16.6% after the antivirus
software maker issued a profit warning and unexpectedly
announced that its chief executive officer would step down.
Shares of Ford Motor Corp rose 2.4% after Bank of America
Merrill upgraded the carmaker's stock to "buy" from "neutral",
according to reports.
On the macro front, a U.S. Labor Department report, due at 8:30
a.m. ET, is expected to show the consumer price index rose 0.4
percent in April, after a similar gain in March.
(Reporting by Amy Caren Daniel in Bengaluru; Editing by Sriraj
Kalluvila)
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