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U.S. stock futures pointed to a tumble at the open Wednesday, as fresh worries about a potential trade war between the U.S. and China weighed on investors.
Chinese officials said Wednesday that they plan to impose tariffs of up to 25% on 106 American products such as soybeans. That comes after the Trump administration on Tuesday gave details on the $50 billion of Chinese goods that it plans to hit with 25% tariffs unless Beijing makes major trade and investment concessions soon.
What are the main benchmarks doing?
Dow Jones Industrial Average futures YMM8, -2.40% fell by 553 points, or 2.3%, to 23,431, while S&P 500 futures ESM8, -1.92% shed 46.70 points, or 1.8%, to 2,566.50. Nasdaq-100 futures NQM8, -2.27% gave up 145.75 points, or 2.3%, to 6,323.50.
On Tuesday, the Dow DJIA, +1.65% , S&P 500 SPX, +1.26% and Nasdaq Composite COMP, +1.04% all rose by more than 1%, rallying somewhat from a sharp selloff on Monday.
What’s driving markets?
Worries are persisting about a potential global trade war, helped by China’s response to the U.S government’s move. China’s ambassador to the U.S. earlier had said his country would “fight back” against Washington’s levies, according to a CNBC report.
Check out: How a ‘trade skirmish’ could become a global ‘trade war’
Technology stocks are staying in focus, after driving recent losses. Shares of e-commerce giant Amazon.com Inc. AMZN, +1.46% rallied Tuesday, but the company has been under pressure from President Donald Trump’s attacks on it.
What are strategists saying?
“Trading should remain quite volatile, as the prospect of a trade war between the U.S. and China continues to cast a dark shadow over global capital markets,” said Stephen Innes, head of Asia-Pacific trading for Oanda, in a note.
Which stocks are in focus?
Manufacturers with significant exposure to China were showing big losses in premarket action, with aerospace giant Boeing Co.’s stock BA, +2.60% down 6.5%, while heavy-machinery maker Caterpillar Inc. CAT, +0.81% fell 4.5%. Ford Motor Co. F, +2.67% and General Motors Co. GM, +3.30% were both down about 4%.
China’s Commerce Ministry published a list of major American exports that were being targeted, and it included airplanes, cars and chemicals, along with soybeans SK8, -4.05% , sorghum and beef.
Tesla Inc. shares TSLA, +5.96% dropped 5% premarket. Late Tuesday, the maker of electric cars reported first-quarter production and delivery numbers that missed expectations, but said it would not need to raise more money this year.
Music-streaming service Spotify Technology SA SPOT, +12.89% looks set to stay in the spotlight in its second day of trading on the New York Stock Exchange. The stock opened with a bang Tuesday, but closed on a down note. Shares fell 1% in premarket action on Wednesday.
Shares in homebuilder Lennar Corp. LEN, +0.46% and used-car seller CarMax Inc. KMX, +0.07% are likely to see active trading, as they’re among the companies expected to post earnings before the open.
Which economic reports are on tap?
ADP’s report on private-sector employment in March is slated to hit at 8:15 a.m. Eastern Time, arriving ahead of Friday’s closely watched government data on nonfarm payrolls.
Markit is scheduled to publish a March report on services at 9:45 a.m. Eastern. Then, ISM is due to release an update to its nonmanufacturing index at 10 a.m. Eastern, with economists polled by MarketWatch forecasting a March reading of 59.0%.
Also at 10 a.m. Eastern, a February figure for factory orders is on tap, with 1.7% growth expected.
Check out: MarketWatch’s Economic Calendar
On the Federal Reserve front, minutes from the central bank’s March 20-21 meeting are due for release at 2 p.m. Eastern.
St. Louis Fed President James Bullard is slated to give a speech on monetary policy to the Arkansas Bankers Association in Little Rock at 9:45 a.m. Eastern, and Cleveland Fed President Loretta Mester is schedule to talk about diversity in economics at 11 a.m. Eastern at Central State University in Wilberforce, Ohio.