US Stock Futures Extend Losses as Trade Spats Intensify

US Stock Futures Extend Losses as Trade Spats Intensify


Major US indices extended losses amid growing concerns over trade spats between China and the United States. President Trump's tweet over the weekend renewed investors' woes over a full-blown trade war between China and the United States which would crush the global economy. The comments of US officials which confirmed that tariffs would be imposed later this week fueled the plunge in US stocks. The Dow Jones Industrial Average dropped to a six-week low of 25751, the S&P500 futures declined to 2864, and the Nasdaq futures fell to 7581.


The dollar index which measures the greenback against a basket of major currencies settled almost flat at 97.55. The growing market uncertainty due to the trade disputes between China and the United States affected investors' behavior. The JOLTS Job Openings for March came in at 7.488 million beating estimates of 7.350 million to confirm the strength of the US jobs market. Market participants will be looking for fresh fundamental developments to jump into the next trade. The US 10-year Treasury yields rose slightly to 2.467%, the USDJPY tumbled to a six-week low of 109.90, and the EURUSD edged higher to $1.1212.


The Reserve Bank of New Zealand lowered interest rates earlier this morning to 1.50% from 1.75% prior. The bank had several factors that forced this stimulus step. The key downside risks to economic growth were larger than anticipated, especially in China and Australia. Moreover, the weaker domestic spending and headwinds to growth and employment urged the bank to implement monetary easing measures. The NZDUSD dropped to $0.6525, the lowest since late October, but the pair recovered from losses and traded slightly below $0.66.


Gold prices extended gains and raced higher towards a two-week high of $1288 supported by rising market risks and uncertainties. The revival of the trade war between China and the United States forced investors to rush to safety. Gold is well-known as investors' safe haven during times of high market risks. On the other hand, the silver ounce hovered slightly below $15, and palladium dipped to $1315.


Oil prices drifted lower following reports that the EU is striking a deal with Iran to keep Iran's oil exports flowing into European markets. On the other hand, the American Petroleum Institute reported that the weekly US oil stock rose by 2.806 million barrels last week. The West Texas Intermediate crude futures dropped to $60.64, and Brent futures declined to $69.36. Market participants will be waiting for the release of the weekly oil report by the US Energy Information Administration later today.

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