US pre-open: Stocks to edge lower ahead of more Sino-US talks
US stocks looked set to edge lower at the open on Friday as investors eyed the resumption of trade talks between the US and China, amid hopes that the two nations can still strike a deal.
At 1220 BST, Dow Jones Industrial Average and Nasdaq futures were down 02%, while S&P 500 futures were 0.3% weaker.
China has vowed to retaliate after the US lifted tariffs on $200bn of Chinese goods to 25% from 10%. China said it "deeply regrets" the move and will have to take "necessary counter-measures."
However, with stock futures only slightly lower, it seemed that market participants were hopeful a deal can still be struck, as talks between Chinese Vice Premier Liu He and US trade representatives were set to resume later in the day in Washington.
It was understood that the new tariff rate imposed by the US will not hit goods in transit, but only those shipped from China on 10 May.
Danske Bank said this leaves a window where tariffs will not be put on goods until they have reached the US, with the potential they could be removed by then if a deal is struck.
"There are many scenarios from here but our baseline is still that we will have a deal by the end of Q2 - so within two months. The road there can take many paths, though. There is also a real risk that the problems are bigger and Trump adds more pressure with tariffs on all Chinese goods. This would be a mistake in our view as it would backfire quickly. But it is also a scenario that cannot be ruled out," said Danske.
"For now, we need to see what comes out of the talks Friday. It can flip to both sides: further escalation, or resumption of talks with the aim to get a deal soon while tariffs and countermeasures are in place."
In corporate news, Viacom shares were likely to be active after the company's second-quarter earnings surpassed analysts' expectations, but revenue fell short.
On the data front, the consumer price index for April is due at 1330 BST.