US open: Stocks attempt to avoid third straight day of losses, open slightly higher

Stocks opened slightly higher on Wednesday, hoping to avoid a third straight day of losses on the back of escalating tensions between Washington and Beijing.

As of 1515 BST, the Dow Jones Industrial Average was up 0.04% at 25,976.01, while the S&P 500 traded 0.05% firmer at 2,885.39 and the Nasdaq moved ahead 0.03% to 7,965.79.

The Dow opened 10 points higher despite the hit to investor sentiment overnight after the White House revealed it had 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.

Hence Donald Trump's response on Sunday by taking to Twitter 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 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 dipped by 2.7% in April following a jump of 14.2% in March, which was shy of the consensus forecast for an increase of 3.0%.

Elsewhere, as of 1530 BST, West Texas Intermediate was up 0.11% at $61.47 a barrel, while Brent Crude was fetching $69.84 per barrel - a 0.06% drop.

On the corporate front, ADRs in automakers Honda and Toyota Motors were down 4.24% and 0.38%, respectively, following the release of their quarterly figures, while fast-food chain Wendy's was up 1.73% in early trade on the back of its own figures.

Ridesharing outfit Lyft slumped 4.10% at the bell after the release of its first quarterly figures since its IPO in March and TripAdvisor tumbled 12.99% as a result of its earnings last night.

Media giant Fox will report after the close.

In data news, US mortgage applications increased 2.7% last week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.