Dow futures drop 100 points after report says US-China trade deal is unlikely this week

U.S. stock index futures fell on Tuesday after a report from the South China Morning Post said China and the U.S. are unlikely to reach a trade deal this week.

Around 7:10 a.m. ET, Dow Jones Industrial Average futures were down 100 points, indicating a drop of 117.60 points at the open. S&P 500 and Nasdaq 100 futures also pointed to a lower open.


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The report said chances of a deal on that front are falling as the U.S. focuses on finalizing a trade deal with Mexico and Canada. Sources told CNBC on Monday that House Democrats and the Trump administration are close to a tentative deal that would replace North American Free Trade Agreement.

However, the Morning Post report added that additional tariffs on Chinese goods are not expected to take effect. The U.S. had set Dec. 15 as a deadline for both sides to reach a so-called phase one trade deal. If a deal was not reached by then, the U.S. would implement more tariffs targeting China.

The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

Trade bellwethers Apple and Boeing were down 0.8% and 0.5%, respectively. The VanEck Vectors Semiconductor ETF (SMH) slid 0.9%.

Investors will also closely monitor the Federal Reserve as the central bank kicks off its last two-day monetary policy meeting of the year. The Fed is expected to hold rates steady.

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