US stock futures lower on China trade tensions

U.S. stock futures pointed sharply lower Friday as Wall Street investors worried about possible consequences of President Trump’s executive order aimed at banning Huawei equipment from U.S. networks.

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China has threatened to retaliate against the U.S. for the order, which took effect Thursday and also subjects the Chinese telecommunications giant to strict export controls.


The intensifying brinkmanship trade conflict depressed investor sentiment.

Shane Oliver of AMP Capital said in a commentary that the trade issue “could still get worse before it gets better, but our view remains that a deal will ultimately be reached to resolve the issue given the economic (and in Trump’s case political) damage that would be caused if a deal is not reached,” according to The Associated Press.

Ticker Security Last Change %Chg
I:DJI DOW JONES AVERAGES 25862.68 +214.66 +0.84%
SP500 S&P 500 2876.32 +25.36 +0.89%
I:COMP NASDAQ COMPOSITE INDEX 7898.0455 +75.90 +0.97%

Declines in U.S. stock futures worsened in the runup to the opening bell. Dow Jones Industrial Average was down 0.76 percent, the S&P 500 was 0.74 percent lower and the Nasdaq Composite was off 0.98 percent.

The Bank of America analysts said Friday the trade war standoff is not just weighing on investor sentiment; it is hurting the U.S. economy.

“We think the latest brinkmanship around trade will slice 0.1pp from GDP growth this year, prompting us to lower our forecast to 2.5%. It will slightly boost core goods inflation, albeit on the margin,” the bank’s analysts said.

The yield on the 10-year Treasury was 2.37 percent.

Crude oil prices rose more than 1 percent to $63.53 per barrel.


China’s Shanghai Composite closed down 2.43 percent, the Hang Seng ended off 1.16 percent and Japan’s Nikkei 225 closed up 0.86 percent.

Britain’s FTSE 100 slipped 0.30 percent, France’s CAC 40 was down 0.44 percent and Germany’s DAX fell 0.82 percent.

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