US pre-open: Stocks set to slide for third-straight session
US futures pointed to a third straight day of losses ahead of the opening bell on Wednesday, following on from a dour session a day earlier on the back of escalating tensions between Washington and Beijing.
As of 1230 BST, Dow Jones futures were pointing to a loss of 0.59% at the open, while the S&P 500 and Nasdaq were looked set to fall by 0.66% and 0.78% at the opening bell, respectively.
Sentiment took a hit overnight after the White House revealed it received a diplomatic cable from Beijing late on Friday containing systematic edits to the pair's nearly 150-page draft trade agreement, threatening to undo months of negotiations between the world's two largest economies.
In response, Donald Trump took to Twitter on Sunday to announce an increase in tariffs, from 10% to 25%, on $200bn-worth of Chinese goods, including internet modems and routers, printed circuit boards, vacuum cleaners and furniture.
Discussing the market reaction to the news, Kingswood head of research Rupert Thompson said: "Hopes of a US-China trade deal were a major factor behind the sharp rebound in markets this year and with Trump's tariff threat now putting a deal in doubt, it is no surprise equities have taken a hit.
"However, the 2% drop in global equities from their high has to be seen in the context of the 15% gain seen year-to-date prior to Trump’s tweets. It is hard to tell whether the latest ratcheting up of tension is just part of Trump’s negotiating tactics or there has been substantive backtracking by the Chinese to justify his intervention. Either way, it is still in the interest of both parties to reach a deal."
Investors were also likely to be digesting news that Chinese export growth fell back unexpectedly last month and while an acceleration in imports pointed to an improvement in the domestic economy, economists were somewhat divided on the strength one could expect of any rebound.
According to customs data, in US dollar terms the year-on-year rate of export growth slowed from a jump of 14.2% for March to a dip of 2.7% for last month, which was shy of the consensus forecast for an increase of 3.0%.
In data news, US crude oil inventories were set to be released at 1530 BST. As of 1230 BST, West Texas Intermediate was down 0.37% at $61.17 a barrel, while Brent Crude was fetching $69.51 per barrel - a 0.53% drop.
US mortgage claims data was also still to come.
On the corporate front, automakers Honda and Toyota Motors, along with fast-food chain Wendy's, will turn in their latest results before the opening bell, while Fox will report after the close.