U.S. stock index futures were sharply lower Tuesday after the world’s two largest economies began imposing new tariffs on one another’s goods.
Around 7 a.m. ET, Dow Jones Industrial Average futures dropped 200 points, implying a decline of 202 points at the open. Futures on the S&P 500 and Nasdaq 100 were both lower. The declines came after investors observed a market holiday on Monday.
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Chipmakers such as Nvidia and Skyworks Solutions fell 1.3% and 0.5%, respectively, in the premarket. Retail stocks Ulta Beaut, Tiffany and Nike all traded lower before the bell. Boeing and Caterpillar both declined more than 1% along with Apple.
The U.S. imposed 15% tariffs on a variety of Chinese goods on Sunday, while China imposed new charges on U.S. products from September 1. It marked the latest escalation in their long-running trade war.
Both countries 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.
President Donald Trump has said officials from both sides were still planning to meet later this month, despite rising tensions.
On Monday, Beijing filed a complaint against Washington at the World Trade Organization over U.S. import duties. China claimed the latest round of tariffs violated a consensus reached by leaders of both countries in Osaka, Japan.
Aside from trade, market participants continued to monitor the fallout of Britain’s constitutional crisis over Brexit.
U.K. lawmakers return from a summer recess on Tuesday, with a cross-party group of MPs (members of parliament) expected to apply for an emergency debate and seize control of the agenda of the House of Commons.
The move is an attempt to stop a so-called “no-deal” Brexit on October 31, which is seen by many inside and outside of parliament as a “cliff-edge” scenario to be avoided at all costs.
Prime Minister Boris Johnson could call for a snap general election if opposition lawmakers vote against a no-deal Brexit this week.
On the data front, manufacturing Purchasing Managers’ Index (PMI) figures for August will be released at around 9:45 a.m. ET. The Institute for Supply Management’s (ISM) manufacturing index for August and construction spending data for July will be released slightly later in the session.
Source: cnbc.com | Original Link