(Reuters) – Wall Street was set to open lower on Thursday, with focus on a high-stakes meeting between the United States and China that could decide the fate of a long-awaited trade deal, even as additional tariffs on Chinese goods loomed.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 8, 2019. REUTERS/Brendan McDermid
Trump vowed not to back down on imposing new tariffs unless Beijing “stops cheating our workers”, as two-day talks begin in Washington on Thursday.
China has threatened to retaliate if tariffs on $200 billion worth of Chinese goods increase to 25% on Friday, rekindling worries of a global economic slowdown and triggering flight to safety among investors.
“It is a concerning feeling for investors because they don’t know what to make of these conflicting signals from trade talks,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
“There isn’t really a lot of precedent for what Trump is doing here but the general view is that he does want an agreement. The talks aren’t dead and there is potential that they might still reach an agreement.”
The benchmark S&P 500 index is set to extend a three-day losing streak that has pulled it 2.6% below the record high of 2,954.13 hit last week.
Trade-sensitive industrial bellwethers Boeing Co and Caterpillar Inc dropped 0.5% in premarket trading.
Data showed U.S. goods trade deficit with China, a focus of the Trump administration’s “America First” agenda, dropped to a five-year low in March amid a surge in exports, including soybeans.
At 8:40 a.m. ET, Dow e-minis were down 194 points, or 0.75%. S&P 500 e-minis were down 24.5 points, or 0.85% and Nasdaq 100 e-minis were down 81.5 points, or 1.07%.
Micron Technology Inc, Advanced Micro Devices Inc, Nvidia Corp and Intel Corp fell between 1% and 3%.
The broader Philadelphia Semiconductor index has declined almost 5% so far this week, and is on pace to post its biggest percentage weekly loss since Dec. 21.
The sector, which is heavily reliant on China for revenue, was also pressured by a modest profit growth forecast from Intel.
In a bright spot, Tapestry Inc jumped 16% after the company beat quarterly profit estimates and announced a $1 billion share buyback program.
Chevron Corp climbed 3.5% after the oil major said it would not raise its $33 billion offer to buy Anadarko Petroleum Corp.
Reporting by Shreyashi Sanyal and Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila