Investing.com – U.S. stock futures pointed to a sharply lower open on Wall Street on Thursday, erasing earlier gains as trade tensions escalated after Beijing vowed to take “countermeasures” over U.S. plans to slap new tariffs on all remaining Chinese imports.
China’s finance ministry said in a statement Thursday it has to take “necessary countermeasures” against U.S. President Donald Trump’s planned tariffs on $300 billion of Chinese goods. The statement added that the tariffs violated a consensus reached by the leaders of both countries.
The escalation in the trade war came a day after a tweet by Trump that linked the dispute and Chinese President Xi Jinping’s handling of protests in Hong Kong.
Earlier this month Trump said the U.S. would impose tariffs on $300 billion of Chinese goods from Sept. 1, which would effectively cover all Chinese imports. He later said the new tariff would be deferred until Dec. 1 for around half of the goods affected.
were down 187 points or 0.7% by 06:55 AM ET (10:55 GMT) while were down 16 points, or 0.6%, and were down 79 points, or 1%.
The losses came after the Jones Industrial Average’s worst day of the year on Wednesday after the U.S. Treasury yield curve inverted for the first time in 12 years.
The inversion, where yields trade higher than yields, is considered by some analysts to be a sign that the U.S. economy is likely to enter a recession.
Investors were looking ahead to U.S. economic reports due out later in the day amid heightened concerns over the economic outlook.
for July, the manufacturing index and manufacturing survey, as well as last week’s i and second-quarter unit all hit the wires at 8:30 AM ET (1230 GMT). Nationwide data for and manufacturing output follow 45 minutes later, while the National Association of Home Builders’ comes at 10 AM (1400 GMT).
Earnings reports from Walmart (NYSE:) and Alibaba (NYSE:), bellwethers for the U.S. and Chinese consumer, will give some insight into global retail and consumption trends ahead of the open.
–Reuters contributed to this report
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