U.S. stock futures struggled for direction Friday, as major indexes headed for their worst weekly return so far this year after the Trump administration made good on a threat to raise import taxes on $200 billion in Chinese goods.
How are benchmark indexes faring?
Reversing earlier losses, Dow Jones Industrial Average futures YMM9, +0.02% rose 17 points to 25,833, while S&P 500 futures ESM9, -0.06% dropped 0.4 point to 2,872. Nasdaq-100 NQM9, -0.05% rose 3.25 point to 7,599.
On Thursday, the Dow Jones Industrial Average DJIA, -0.54% fell 138.97 points, or 0.5%, to end at 25,828.36 after falling by as much as 450 points earlier. The S&P 500 index SPX, -0.30% dropped 0.3% to 2,870.72 and the Nasdaq Composite Index COMP, -0.41% lost 0.4%, to 7,910.59.
For the week as of Thursday, the Dow and S&P 500 are set for losses of around 2.6% and the Nasdaq is down 3.1%. Those losses would mark the worst weekly return since the market selloff in December.
What’s driving the market?
Trade tensions that have been dogging the market all week were front and center on Friday as President Donald Trump’s increased tariffs on $200 billion in Chinese imports kicked in as of 12:01 Eastern time Friday. Beijing has vowed to retaliate, though no specific details of such tariff hikes have been made public yet.
The tariffs came as negotiators for the two sides resumed talks Thursday in Washington, but little progress was reported, with discussions were set to resume Friday. The higher tariffs come as Trump has voiced frustration over the pace of talks in recent days and has accused the Chinese of reneging on commitments made in previous rounds of negotiation.
Read: ‘China has chosen to retreat’—the U.S. view as negotiations reach critical juncture
U.S. stocks pared losses in Thursday’s session after Trump’s said he had received a “beautiful letter” from Xi and suggested there was scope for a deal.
Read: Here’s the hit U.S., Chinese and global economies could face as trade battle heats up
And : Here are the stocks to buy if an all-out U.S.-China trade war erupts, says Goldman
As investors monitor trade headlines, a smattering of economic data could provide a slight distraction. April consumer prices are due at 8:30 a.m. Eastern Time, followed by the Federal budget at 2 p.m. Eastern.
Federal Reserve Governor Lael Brainard will make opening remarks at Fed’s community development research conference at 8:30 a.m. Eastern. Atlanta Fed President Raphael Bostic will take part in a moderated discussion about the economy and interest rates at the East Mississippi Business Development Corp Bank President’s rountable at 9 a.m. Eastern
New York Fed President John Williams makes remarks at the 21st annual Bronx Bankers breakfast at 10 a.m. Eastern.
What are strategists saying?
“The only good news here is that China stays for talks on Friday. The fact that talks were only 90 minutes suggests there was little movement on both sides. The talks Friday will probably focus on how to get talks back on track, said analysts at Danske Bank, in a note to clients.
“Best guess now is that both sides talk Friday and then pause for a rethink of how to proceed. If so, we are in for a period of high uncertainty. But we need to await the outcome of Friday’s talks to make closer assessment,” said the analysts.
How are other markets trading?
Stocks were volatile in Asia, with the Nikkei 225 index NIK, -0.27% falling 0.6%, though the Shanghai Composite Index SHCOMP, +3.10% managed a gain of 1%. European stock futures were modestly higher.
Gold GCM9, -0.02% inched up, while the U.S. dollar was steady DXY, -0.04% fell against the Japanese yen USDJPY, +0.03% and crude oil prices CLM9, +0.50% inched up.
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