US pre-open: Stocks to edge up as investors brush off US-China trade conflict

US stocks looked set to rise at the open on Tuesday, taking their cue from positive sessions in Asia and Europe as investors brush off the latest escalation in trade relations between the US and China.

Trump announced late on Monday that he was imposing 10% tariffs on $200bn worth of Chinese imports, a levy that will be raised to 25% from January. If Beijing retaliates, the US will impose tariffs on an additional $267bn of Chinese goods.

"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly," Trump said in a statement. "But, so far, China has been unwilling to change its practices."

Still, an upbeat open was on the cards, with Dow Jones Industrial Average and S&P 500 futures up 0.2% at 1220 BST, and Nasdaq futures 0.3% higher.

Oanda analyst Craig Erlam said: "Investors have taken US President Donald Trump’s announcement of new tariffs against China in their stride on Tuesday, with indices across much of Asia and Europe in the green and US futures a little higher.

"The tariffs have been talked about for some time now and it was only a matter of time until the announcement came so there was no reason to expect too much of a response, unless either the final number was higher or the list included unexpected items that investors deemed damaging.

"The ball is now in China’s court, how they respond will determine how big an escalation we can expect and what the economic and market price will be. So far, the economic impact has been minimal but we’ve only just entered into significant tariff territory. The greatest impact has come in the markets, with Chinese stocks having fallen into bear market territory and the yuan having fallen more than 10% against the dollar."

In corporate news, General Mills looked set for a negative open as its first-quarter profit beat expectations but sales fell a little short.

AutoZone edged higher in pre-market trade after the release of the company's fourth-quarter earnings, while BorgWarner was likely to be in focus after cutting its profit and sales guidance.

Elsewhere, Oracle was in the red ahead of the opening bell after its first-quarter numbers late on Monday.

On the data front, the NAHB housing market index for September is out at 1500 BST.