May 28, 2019
By Amy Caren Daniel
(Reuters) – U.S. stock index futures dipped on Tuesday following an extended weekend as investors took a cautious stance after President Donald Trump signaled that the United States and China are far from a trade agreement.
Trump on Monday said he was “not yet ready” to make a deal with China but he expected one in the future. The back-and-forth between the two sides has sparked worries that the protracted trade war would lead to a global economic slowdown.
The benchmark S&P 500 index as of Friday’s close was about 4% off its record high hit on May 1, while the bluechip Dow Jones Industrial index posted its fifth straight week of decline.
Investors are also concerned that China might opt to weaponize its holdings of more than $1.1 trillion worth of U.S. Treasuries to retaliate against the U.S. tariffs imposed on Chinese imports.
Apple Inc’s shares were 0.5% lower in premarket trading as Citigroup slashed iPhone unit sales saying the trade situation would result in a slowdown of demand for the phones in China.
At 6:45 a.m. ET, Dow e-minis were down 23 points, or 0.09%. S&P 500 e-minis were down 5.75 points, or 0.2% and Nasdaq 100 e-minis were down 9.75 points, or 0.13%.
Among other stocks, FedEx Corp fell 0.7% after Chinese telecoms equipment maker Huawei Technologies Co Ltd said it is reviewing its relationship with the U.S. package delivery company, after it diverted two parcels destined for Huawei addresses in Asia to the United States.
Gilead Sciences dropped 1.7% after Goldman Sachs downgraded its shares to “sell” from “neutral”, saying the drugmaker has very limited mid-to-late stage pipelines.
Activision Blizzard Inc rose 2.7% after Goldman Sachs upgraded the videogame publisher’s stock to “buy” and said the company would benefit from its recent game releases.
A report from the U.S. Conference Board due at 10 a.m. ET, is expected to show the consumer confidence index rising to a reading of 130 in May from 129.2 in April.
(Reporting by Amy Caren Daniel in Bengaluru; Editing by Saumyadeb Chakrabarty)