US stock futures dip amid global trade concerns

by Andre Janse van Vuuren and Anand Krishnamoorthy

US stock futures dipped to extend days of fluctuations as traders grapple with a fog of uncertainty surrounding the global trade war.

S&P 500 contracts slid 0.5% as the US benchmark is set to continue a run of daily swings between gains and losses. European stocks fell. The dollar rose 0.2% as US Treasuries edged higher, with the 10-year yield declining two basis points to 4.42%.

Two months after President Donald Trump’s sweeping tariff announcements and push for new trade deals, there are few signs of a breakthrough in talks with either China or the European Union — the biggest US trading partners. At the same time, the economy has increasingly shown signs of a moderate yet broad-based softening. 

The White House on Monday sought to push ahead with efforts to arrange a call between Trump and his Chinese counterpart Xi Jinping, but representatives of the Chinese leader have yet to reciprocate interest.

“We’re clearly seeing a lot of volatility and investors want more visibility,” Massimiliano Bondurri, founder and chief executive officer of SGMC Capital in Singapore, said on Bloomberg TV. “It’s normal that markets are actually going to be flip-flopping.”

Meanwhile, Trump worked the phones Monday and took to social media to try to sway Republican holdouts on his multi-trillion dollar tax bill. Investors and traders have raised concern that the legislation could worsen a ballooning budget deficit and US debt pile.

In Europe, investors’ attention will turn to inflation data for the euro zone due later on Tuesday. Annual price growth is anticipated to hit 2% for the first time in seven months after reports showing weakening in the region’s four biggest economies. 

Money markets are all but certain of a 25 basis point cut when the European Central Bank delivers its policy decision on Thursday, with at least one additional reduction expected later this year.

Corporate Highlights:

• Toyota Industries Corp. said it received a $33 billion offer to take the company private
• Thames Water’s preferred bidder KKR & Co. has pulled out of a rescue deal in a major setback for the utility.
• Rheinmetall AG’s surging stock price has earned the tank and munitions maker a place in the euro area’s main stock benchmark.
• Julius Baer’s latest strategy update doesn’t impress analysts.
• A consortium including Pandox AB and Eiendomsspar AS has submitted a non-binding bid for Dalata Hotel Group Plc.
• Taiwan Semiconductor Manufacturing Co. Chief Executive Officer C. C. Wei blamed worsening traffic snarls for delays in expanding its base in southwestern Japan, even while a parallel US effort races ahead.

 Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.3% as of 9:01 a.m. London time
• S&P 500 futures fell 0.5%
• Nasdaq 100 futures fell 0.4%
• Futures on the Dow Jones Industrial Average fell 0.5%
• The MSCI Asia Pacific Index rose 0.1%
• The MSCI Emerging Markets Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.2% to $1.1413
• The Japanese yen was little changed at 142.83 per dollar
• The offshore yuan rose 0.3% to 7.1923 per dollar
• The British pound fell 0.2% to $1.3517

Cryptocurrencies

• Bitcoin rose 0.3% to $105,255.59
• Ether rose 2.8% to $2,611.17

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.42%
• Germany’s 10-year yield declined two basis points to 2.51%
• Britain’s 10-year yield declined four basis points to 4.63%

Commodities

• Brent crude rose 0.8% to $65.13 a barrel
• Spot gold fell 0.6% to $3,360.77 an ounce

This story was produced with the assistance of Bloomberg Automation.

Copyright Bloomberg News