US pre-open: Stocks seen lower as investors grow nervous ahead of G7
US futures pointed to a downbeat open on Wall Street on Friday as investors grew nervous ahead of the G7 summit in Canada, which looked set to be an acrimonious two days of talks.
At 1210 BST, Dow Jones Industrial Average futures were down 0.6%, while S&P 500 and Nasdaq futures were 0.5% and 1% lower, respectively.
Investors are expecting US President Trump to find himself isolated from other leaders at the summit. French President Emmanuel Macron has already warned that he won’t sign the traditional joint statement unless progress is made on tariffs, while Germany’s Angela Merkel is expected to challenge Trump on trade, climate and security.
Trump tweeted on Thursday: "Prime Minister Trudeau is being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things...but he doesn’t bring up the fact that they charge us up to 300% on dairy - hurting our Farmers, killing our agriculture!
Before that, he had tweeted: "Please tell Prime Minister Trudeau and President Macron that they are charging the US massive tariffs and create non-monetary barriers. The EU trade surplus with the US is $151bn, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow."
Craig Erlam, senior market analyst at Oanda, said: "While Trump has at times appeared friendly with certain other heads of state in the past, the relationships have at least appeared to have become more hostile since tariffs were imposed on the European Union, Canada and Mexico by the US last week. The G7 meeting has become more like a G6+1, with Trump choosing to isolate the US on a number of issues from trade to Iran and climate change.
"Macron himself made reference to this in a tweet on Thursday which Trump quickly followed with one of his own attacking the EU and Canada over trade tariffs and non-monetary trade barriers. None of this makes investors particularly hopeful that the two 'allies' will reach an agreement and avoid an escalation of the trade spat that has caused so much worry for investors."
Erlam added that markets still haven’t fully recovered from the correction after the turn of the year, with the Dow just under 5% off its highs and the S&P 500 more than 3%, partly due to the ongoing spat between the US and its major trading partners.
On the corporate front, Broadcom was weaker in pre-market trade after its quarterly earnings late on Thursday, while US-listed shares of Deutsche Bank were also in the red following a report that it was exploring a possible merger with Commerzbank.
On the macroeconomic calendar, wholesale inventories are due at 1500 BST.