Stock Futures slip as trade tensions weigh

[September 03, 2019]  By Uday Sampath Kumar

(Reuters) - U.S. stock index futures fell on Tuesday, as Washington's new round of tariffs on some Chinese goods kicked in and after a report that officials from both sides were struggling to decide on the schedule for a meeting this month.

Shares of trade-sensitive industrial bellwethers Caterpillar Inc <CAT.N> and Boeing Co <BA.N> fell 1.5% each in premarket trading, while those of Apple Inc <AAPL.O> fell 1%.

A monthly survey on manufacturing activity by the Institute for Supply Management, due at 10 a.m. ET, is expected to shed some light on the impact of the trade war on the U.S. industrial sector.

The S&P 500 index fell 1.8% in August, its biggest monthly drop since May, after escalating U.S.-China trade tensions and the inversion of a key part of the U.S. yield curve, seen as a recessionary signal, drove investors toward safe-haven assets.

The benchmark index, however, ended the week up nearly 3% as trade tensions were dialed down following signals that Beijing and Washington would meet in September for talks.

Bloomberg, however, reported on Monday that the two sides were yet to agree on a date for the planned meeting.

The Trump administration on Sunday began collecting 15% tariffs on more than $125 billion in Chinese imports, while China began imposing new duties on U.S. crude.
 

A trader works on the trading floor at the New York Stock Exchange (NYSE) at the opening of the market in New York City, U.S., August 26, 2019. REUTERS/Andrew Kelly

Chipmakers, which draw a large portion of their revenue from China, also fell, with Intel Corp <INTC.O>, Advanced Micro Devices <AMD.O> and Micron Technology Inc <MU.O> off between 1.4% and 2%.

At 7:27 a.m. ET, Dow e-minis <1YMcv1> were down 207 points, or 0.78%. S&P 500 e-minis <EScv1> were down 21.25 points, or 0.73% and Nasdaq 100 e-minis <NQcv1> were down 63.25 points, or 0.82%.

Along with the manufacturing data, investors will also keep a close watch on the monthly jobs report due Friday for clues on the health of the U.S. economy.

Also on Friday, Federal Reserve Chair Jerome Powell will speak at an event hosted by the Swiss Institute of International Studies, University of Zurich.

(Reporting by Uday Sampath in Bengaluru; Editing by Anil D'Silva)

[© 2019 Thomson Reuters. All rights reserved.]

Copyright 2019 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.