Futures dip on reports U.S. to target another Chinese firm

[May 22, 2019]   By Shreyashi Sanyal

(Reuters) - U.S. stock index futures dipped on Wednesday, as fears of a possible escalation in the trade war between the United States and China were rekindkled after reports that Washington could impose sanctions on another Chinese company.

This followed Washington's decision to temporarily ease curbs on Huawei Technologies, which on Tuesday offered a reprieve for investors who feared a hit to the global technology sector after the Trump administration added the Chinese telecoms equipment maker to a trade blacklist last week.

However, sentiment soured on reports of the U.S. administration considering Huawei-like restrictions on Chinese video surveillance firm Hikvision.

The back-and-forth between the United States and China have kept investors on edge, knocking the benchmark S&P 500 index 3% off its all-time high on May 1.

Markets also waited for minutes from the Federal Reserve's two-day policy meeting in late April when it held interest rates steady. The minutes are due at 2 p.m. ET (1800 GMT).

Fed's St. Louis chief James Bullard, a voter in the rate-setting committee this year, said on Wednesday further weakness in inflation could prompt the central bank to cut rates, even if economic growth maintains its momentum.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 20, 2019. REUTERS/Brendan McDermid

At 7:17 a.m. ET, Dow e-minis were down 49 points, or 0.19%. S&P 500 e-minis were down 7 points, or 0.24% and Nasdaq 100 e-minis were down 30 points, or 0.4%.

Lowe's Cos Inc fell 8.2% premarket after the home improvement chain slashed its full-year profit forecast, a day after disappointing earnings from department store operators including Kohl's Corp and J.C. Penney Co Inc.

Nordstrom Inc plunged 11% in premarket trading after the department store operator cut its forecast for full-year sales and profit.

But retailer Target Corp jumped 7.7% after its quarterly same-store sales and profit beat Wall Street estimates.

Among others, Qualcomm Inc fell 9.8% after a federal judge ruled that the chipmaker unlawfully suppressed competition in the market for cellphone chips and used its dominant position to exact excessive licensing fees.

(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

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