Stock futures point to flat open as Trump says the US is not ready to make trade deal with China

U.S. stock futures indicated a flat open on Tuesday, with financial markets on edge as trade worries remain high on investors’ list of concerns.

Dow Jones Industrial Average futures pointed to a gain of just 18 points at the open. Futures indicated the S&P 500 and Nasdaq 100 would open little changed.

President Donald Trump said Monday the U.S. was “not ready” to make a deal with China, before adding he expected one in the future. Trump also said tariffs on Chinese imports could go up “substantially.”

Trump’s comments come after a commentary piece in Chinese state-run newspaper hinted China would not bend to U.S. demands change its state-run economy. The U.S. has raised concern over state-run companies and the forced surrender of intellectual property.

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“Trump is playing a Game of Thrones with both foreign and domestic adversaries,” said Ed Yardeni, president and chief investment strategist at Yardeni Research. “Since he is the President of the world’s greatest economic and military power, he claimed that he will consummate lots of deals with them that will greatly benefit the US in short order. The results have been mostly disappointing so far.”

Trade tensions between the two countries escalated earlier this month as both countries hiked tariffs on billions of dollars worth of each other’s goods. The increasing tensions have pushed the S&P 500 down more than 4% in May through Friday’s close.

Investors have been piling into the traditionally safer Treasurys this month. The yield on the benchmark 10-year note fell to around 2.27%, its lowest level in 19 months.

On the data front, the S&P/Case-Shiller home prices index (HPI) and the Federal Housing Finance Agency HPI for March are both expected at around 9:00 a.m. ET.

Consumer confidence, Richmond Fed surveys and Dallas Fed manufacturing data for May will all follow slightly later in the session.

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