US Stock-Futures Softened on Fresh US-China Tensions

US Stock-Futures Softened on Fresh US-China Tensions


Major US stock index futures kicked off the week on a weaker note on emerging US-China tensions. The White House Economic advisor Larry Kudlow stated on Friday that China will be held "accountable" for the virus outbreak. Moreover, President Trump said that he is considering applying tariffs on China for its handling of the outbreak. Yesterday, the Secretary of State Mike Pompeo announced that there is significant evidence connecting COVID19 to a lab in the Wuhan region. On a different note, Trump threatened further tariffs if China doesn't buy US goods. The stated developments weighed on investors' risk appetite erasing the positivity of reopening the economy in the coming weeks. The Dow Jones Industrial Average futures fell to 23208, the S&P500 futures declined to 2770, and the Nasdaq futures dropped to 8556.


The dollar index, which measures the greenback against a basket of major currencies, trimmed losses and rose to 99.47 amid demand for safety. Risk-sensitive currencies faltered, putting an interim end for their recent rally amid growing tensions between China and the United States, leading investors to safer currencies. Market participants are looking forward to fresh developments on the matter, the reopening of the economy, and a series of important economic indicators among them the jobs report. The EURUSD eased to $1.0924, the AUDUSD plunged to $0.6372, and the USDCAD rallied to 1.4151.


Gold prices edged higher as the US-China tensions triggered the demand for safety. On the other hand, the deepening woes over the economic outlook eased investors' risk appetite. The price of a gold ounce rose to $1707, the price of a silver ounce held steady near $15, and palladium futures dipped below $1900.


Oil prices continued to trade in a tight range near a two-week high awaiting fresh drivers. The OPEC+ deal and the prospects of reopening the economy supported prices, but the emerging US-China tensions capped gains. The West Texas Intermediate crude June delivery drifted lower to $18.09, and Brent blend July delivery fell to $25.49.

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