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Equity futures appeared to extend last week's losses as prospects for a breakthrough in trade talks between the US and China eased.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Future for the S & P 500 (ES = F) lost 1.89%, or 54.5 points, at 8:42 am ET. Dow futures (YM = F) lost 1.82%, or 473 points, while the Nasdaq ((NQ = F) fell by 2.54%, or 193 points. "data-reactid =" 16 "> The S & P 500 futures (ES = F) fell 1.89%, or 54.5 points, to 8:42 am Dow futures (YM) = F) lost 1.82%, or 473 points, while Nasdaq (NQ = F) futures lost 2.54%, or 193 points.
<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "China is about to impose a duty rate of 25% on $ 60 billion worth of US goods as of June 1, the Chinese government & nbsp;announced Monday.& nbsp; This is apparently a retaliatory measure against the recent rise in taxes levied by the Trump administration on billions of dollars in Chinese imports late last week. "data-reactid =" 17 "> China will impose such a high tariff rate The Chinese government announced Monday that it was a measure of retaliation against the recent rise in taxes collected by the Trump administration on billions of dollars of Chinese imports late last week.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Friday, the Trump administration has increased the rate tariffs on Chinese imports to the tune of $ 200 billion to 25%, and & nbsp;ad& nbsp; that additional tariffs on $ 300 billion of imports would be forthcoming. Trump has repeatedly asserted that China & nbsp;"Broken the market"& nbsp; both parties had been working for several months, which led to the use of tariffs to try to obtain new concessions. "data-reactid =" 18 "> Friday, the Trump administration has raised the tariff rate to $ 200 Trump has repeatedly claimed that China had" broken the agreement "to which both parties were parties in recent months, which had led to the use of tariffs to try to obtain new concessions.
<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The sudden end of five months of a cease commercial fire with China shook the markets, & nbsp;trailing& nbsp; The S & P 500 is experiencing its biggest weekly decline since just before Christmas. At the same time, equity holdings continued to rise as the 10-year Treasury Note yield dropped to its lowest level in six weeks, at nearly 2.4%. Treasury yields are inversely proportional to prices. "Data-reactid =" 19 "> The sharp five-month shutdown of a commercial ceasefire with China has shaken the markets, causing the S & P 500 to its worst weekly decline since the Christmas Eve: The yield on 10-year Treasury bills has fallen to its lowest level in nearly six weeks, or nearly 2.4%, and Treasury bill yields are moving in the opposite direction.
Analysts are preparing for rising trade tensions to hold back the pace of growth in the United States. In the first quarter, the US economy grew at a higher than expected rate of 3.2%.
"With the rise of protectionist measures, the damage to economic growth is increasing. If the current US measures and those likely to be taken by China remain in place, GDP is expected to reach 0.5% in China, 0.25% in the US and 0.15% in the US. world, "said Klaus Baader of Société Générale. in a note. "If the US imposes tariffs on all Chinese products and China reacts, these losses could easily double."
Further deterioration in the progress of trade agreements would put downward pressure on equities, as some sectors are particularly vulnerable. Bell maker's shares, including Caterpillar (CAT) and 3M (MMM), each fell by more than 5% last week, underperforming the market's 2% decline.
Technology investors are also watching trade talks unfold "with white fists," commented Dan Ives, an analyst at Wedbush.
"The fundamental fear that drives technology investors is that this movement and a retaliatory movement of the Chinese can inflict on the technological food chain, the semi-actions (Intel, Nvidia, etc.), and obviously Apple, which China relies on both the supply (Foxconn) and on the demand side, "Ives said.
"With concerns that Trump plans to adopt additional tariffs on Chinese products in the future if the trade situation deteriorates further, technology stocks are finally caught between two fires, Apple and the remaining semiconductor industry. at the center of concern and weigh heavily on stocks. morning, "he added.
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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck"data-reactid =" 27 ">Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck
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