U.S. stock index futures traded mixed Thursday morning, amid signs of rising tensions on trade policy between Washington and Beijing, a day after Federal Reserve held interest rates unchanged and indicated it may keep benchmark rates lower for an extended period while monitoring the effects of the tariff spat.
Wall Street investors also were watching for clues about the health of the European economy, following a meeting of the European Central Bank, presided over for the first time by new President Christine Lagarde.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YMZ19, -0.19% inched down 12 points, or less than 0.1%, at 27,913, those for the S&P 500 index ESZ19, -0.14% less than a point at 3,143.25, and Nasdaq-100 NQZ19, -0.20% fell 1.75 points, or less than 0.1%, to 8,404.
On Wednesday, the Dow DJIA, +0.11% rose 29.58 points, 0.11%, Wednesday, closing at 27,911.30, the S&P 500 index SPX, +0.29% closed 9.11 points, 0.29%, higher, at 3,141.63, while the Nasdaq Composite Index COMP, +0.44% rose 37.87 points, 0.44%, to 8,654.05.
What’s driving the market?
President Donald Trump is expected to meet with his trade advisers later Thursday to discuss planned Dec. 15 tariffs on about $160 billion in Chinese goods, Reuters, citing people familiar reported late Wednesday.
However, the Reuters report indicates that a much-hoped-for partial trade pact is not close to coming to fruition, after a year of tit-for-tat increases on import duties for the world’s largest economies.
The likelihood is rising that fresh 15% tariffs will go into effect Sunday on more than $150 billion in annual consumer imports, a move which would be seen as an escalation of animosities and would likely roil global markets, market strategists say.
Tariffs could be raised on a range of consumer products, including cellphones, laptops, videogame devices, coming during an important holiday-sale period, the Wall Street Journal reported.
“The futures are signally a mixed to positive opening as investors focus remains fixed on the looming Chinese tariffs set to go in effect on Sunday,” wrote Peter Cardillo, chief market economist Spartan Capital Securities.
See: Get ready for a jolly holiday season, and maybe a stock-market rally, Ned Davis Research says
Fresh uncertainty about the outcome of the tariff disputes comes after Fed policy makers that they believe interest rates are low enough to stimulate growth, and left monetary policy unchanged on Wednesday afternoon at a 1.75%-2.0% range, while expressing optimism about U.S. economic health. The economic outlook is “a favorable one,” and lower rates are helping, Chairman Jerome Powell said at a news conference following the Federal Open Market Committee’s policy statement a day ago.
“Low rates for longer is always a winner in financial markets,” wrote Jasper Lawler, head of research at London Capital Group, in a Thursday note. “The Fed pointing to another year of interest rates at the current low levels satisfied investors who bought US shares and sold the US dollar in the wake of the meeting,” he said.
Meanwhile, the ECB announced its decision to keep its main deposit rate at negative 0.5%, while maintaining its rate of asset purchases at €20 billion a month, as widely expected by analysts. The meeting of European Central Bank officials was the first presided over by new President Christine Lagarde, and investors will be watching for signals toward future policy moves when she delivers a press conference at 8:30 a.m. Eastern Time.
The ECB gathering comes as the U.K. is holding key general elections, which will play a crucial role in determining the course of its plans to exit from out of the European Union. Recent polling figures, indicate Prime Minister Boris Johnson’s Conservative Party as most likely to win, but his lead has narrowed over the rival Labour Party, injecting a modicum of doubt in the outcome.
Looking ahead, the latest U.S. weekly jobless claims and producer-price index, or PPI, for November are slated to be released at 8:30 a.m.
Which stocks are in focus?
Delta Air Lines DAL, -0.81% said Thursday it expects to generate per-share earnings of $6.75 to $7.75 in 2020 as revenue grows 4% to 6%.
Southwest Airlines LUV, -1.66% said Thursday it has reached a settlement with Boeing BA, +0.60% , over the grounding of its 737 Max fleet totaling about $125 million and that it will share the money with its employees.
Lululemon Athletica LULU, +1.54% fell in after hours trade after the apparel retailer reported an adjusted third-quarter profit below Wall Street expectations late Wednesday.
Fiat Chrysler FCAU, -0.56% ended a lengthy round of labor talks in Detroit with the United Auto Workers and agreed a new four-year contract, the last of three deals negotiated this year by the union.
Disney DIS, +1.02% has been downloaded 22 million times to mobile devices in what is probably the most successful launch in the nascent industry’s history, according to app-tracking firm Apptopia.
Starbucks Corp. SBUX, +0.64% stock rose 1.8% before the start of trade Thursday after it was upgraded to overweight from neutral by J.P. Morgan, after a meeting with company management.
How are other markets faring?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.33% held at around 1.80%.
West Texas Intermediate crude CLF22, -1.03% on the New York Mercantile Exchange gained 12 cents, or 0.2%, to $58.88 a barrel, after a 0.7% decline on Wednesday.
February gold GCG20, +0.48% on Comex added $4.90, or 0.3%, to $1,479.80 an ounce, with the metal on track for a third gain in a row.
The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, -0.29%, was down 0.3% at 97.149, against a basket of a half-dozen currency peers.
In Europe, the Stoxx 600 Europe index SXXP, -0.08% was trading less than 0.1% higher at 406.27.
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