Futures retreat as Sino-U.S. relations sour

[July 22, 2020]  By Medha Singh

(Reuters) - U.S. stock index futures fell on Wednesday as investors shunned risky assets after Washington ordered a shutdown of the Chinese consulate in Houston, escalating tensions between the world's two largest economies.

In response, China is considering the closure of U.S. consulate in Wuhan, a person with direct knowledge of the matter said.

The news comes after three straight sessions of gains for the S&P 500, driven by optimism about an eventual coronavirus vaccine, further fiscal support for the pandemic-hit economy and a batch of positive second-quarter reports.

The benchmark index is less than 4% below its record closing high hit in February.

As the second-quarter earnings season continues, investors are looking for clues to gauge how long it would take for companies to emerge from the economic damage due to the pandemic.

United Airlines Holdings Inc <UAL.O> warned travel demand would remain suppressed until there was a widely accepted treatment or vaccine for COVID-19, which plunged the carrier to a deep quarterly loss. Its shares fell 0.1% in premarket trading.

Check Point Software Technologies Ltd <CHKP.O> rose 0.4% after reporting a better-than-expected quarterly net profit, boosted by increased demand for network security as more people work remotely.

Investors will also keep an eye out for quarterly results from Tesla Inc <TSLA.O> and Microsoft Corp <MSFT.O> after markets close.

A nearly empty trading floor is seen as preparations are made for the return to trading at the New York Stock Exchange (NYSE) in New York, U.S., May 22, 2020. REUTERS/Brendan McDermid

At 6:18 a.m. ET, Dow e-minis <1YMcv1> were down 142 points, or 0.53%. S&P 500 e-minis <EScv1> were down 14.75 points, or 0.45% and Nasdaq 100 e-minis <NQcv1> were down 3.25 points, or 0.03%.

Snap Inc <SNAP.N> declined 8.3% as it said a bump in user growth at the start of coronavirus-induced lockdowns petered out sooner than expected, and it forecast fewer current-quarter users than the Wall Street consensus.

President Donald Trump, in a shift in rhetoric and tone, encouraged Americans on Tuesday to wear masks and warned the coronavirus pandemic would get worse before it got better in his first press briefing in months focused on the outbreak.

The United States reported 1,000 deaths from the disease on Tuesday, surpassing the grim milestone for the first time since June 10.

(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta)

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