Stock futures drop after US threatens more China tariffs
U.S. stock index futures dropped sharply on Wednesday after the United States threatened tariffs on an additional $200 billion worth of Chinese goods, dampening hopes of a compromise on trade.
China’s commerce ministry called the U.S. actions “completely unacceptable”, adding that Beijing will have to respond to the latest moves by Washington.
Global stocks were under pressure overnight, with Chinese markets taking the biggest hit. The Shanghai Composite index .SSEC dropped 1.8 percent, while China's blue-chip CSI300 index .CSI300 declined 1.7 percent.
U.S. officials on Tuesday issued a list of thousands of Chinese imports that the Trump administration wants to target with new tariffs, including hundreds of food products, as well as tobacco, chemicals, coal, steel and aluminum.
There is a two-month period of public comment on the latest proposed list before the tariffs get imposed. President Donald Trump has said he may ultimately target more than $500 billion worth of Chinese goods - roughly the total amount of U.S. imports from China last year.
Among premarket decliners, Boeing (BA.N) and Caterpillar (CAT.N) fell around 1.5 percent each and U.S. Steel (X.N) 2 percent.
Intel (INTC.O), Broadcom (AVGO.O), Micron Technology (MU.O), AMD (AMD.O) and Nvidia (NVDA.O) were down between 1.3 percent and 3.7 percent.
Industrial and metal companies, as well as chipmakers have been the worst hit since Trump first threatened tariffs in early March as they are largely reliant on China for businesses.
At 7:09 a.m. ET, Dow e-minis 1YMc1 were down 198 points, or 0.79 percent. S&P 500 e-minis ESc1 were down 18.25 points, or 0.65 percent and Nasdaq 100 e-minis NQc1 were down 55.25 points, or 0.76 percent.
Facebook (FB.O), Amazon (AMZN.O), Apple (AAPL.O), Netflix (NFLX.O) and Alphabet (GOOGL.O) were all down about 1 percent.
U.S.-listed shares of Chinese companies also tumbled, with e-commerce giant Alibaba (BABA.N) falling 1.7 percent, and JD.com (JD.O) and Baidu (BIDU.O) down 1.8 percent each.
However, TripAdvisor’s (TRIP.O) shares rose 1.9 percent after Barclays upgraded the stock to “overweight” rating.