US stock futures fall amid doubts over the US-China trade deal

Stock futures pointed to a negative open on Tuesday amid questions over whether the U.S.-China trade agreement will resolve the two countries’ dispute in the long term.

At around 8:46 a.m., Dow Jones Industrial Average futures were trading 103 points lower, implying a decline of 93.43 points at the open. S&P 500 and Nasdaq 100 futures also fell.


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The U.S. and China agreed over the weekend to hold off on any additional tariffs on each other’s goods on January 1, in order to allow trade talks to continue. Leaders from the two countries met over dinner at the G-20 summit in Argentina.

But discrepancies over when that truce would begin has led to confusion. While President Donald Trump’s economic advisor, Larry Kudlow, told reporters Monday that the cease-fire would start from January 1, the White House later issued a corrected statement saying that the 90-day truce period would start on December 1.

President Donald Trump and China's President Xi Jinping shake hands at a press conference following their meeting outside the Great Hall of the People in Beijing last November.

Artyorn Ivanov | TASS | Getty Images

President Donald Trump and China’s President Xi Jinping shake hands at a press conference following their meeting outside the Great Hall of the People in Beijing last November.

The U.S. and China have been engaged in a tense sparring match over trade, with both countries hitting each other’s economies with levies on imported goods. Trump’s administration has so far slapped tariffs on $250 billion worth of Chinese imports, while Chinese President Xi Jinping’s government has imposed tariffs on $110 billion in U.S. goods.


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Amid doubts over whether the two can prevent further escalation to the trade war, Treasury Secretary Steven Mnuchin on Monday told CNBC that he is “very hopeful” the two countries can turn the trade truce into a “real agreement.”

Wall Street is also worried about a so-called inverted yield curve. The yield on the three-year Treasury note surpassed its five-year counterpart on Monday. Historically, when short-term yields trade above longer-term rates a recession could follow, though it is often years away after the signal triggers.

In terms of economic data, Redbook sales figures are due at 8:55 a.m. ET. Meanwhile, New York Federal Reserve President John Williams is due to give a speech on tightness in the labor market at 10 a.m. ET.


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Source: cnbc.com | Original Link

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