The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a lower open on Thursday, with stocks likely to see further downside following the pullback seen over the course of the previous session.
Lingering uncertainty about trade may weigh on Wall Street amid a lack of details about the U.S.-China trade deal announced on Wednesday.
President Donald Trump told reporters he would send letters to other U.S. trade partners in about two weeks outlining new tariff rates.
Trump also indicated he would be willing to extend the 90-day pause on tariffs set for early next month but said he doesn’t think it will be necessary.
Selling pressure may also be generated amid geopolitical concerns due to rising tensions between the U.S. and Iran.
A senior Iranian security official said the Islamic Republic is at its “highest level of military readiness” and warned any act of aggression by the United States or Israel would be met with a swift and unexpected response.
Trump said on Wednesday U.S. personnel were being moved out of the Middle East due to heightened security risks in the region.
After moving to the upside early in the session, stocks gave back ground over the course of the trading day on Wednesday. The major averages pulled back well off their early highs and the session in negative territory.
The tech-heavy Nasdaq fell 99.11 points or 0.5 percent to 19,615.88, the S&P 500 dipped 16.57 points or 0.3 percent to 6,022.24 and the Dow edged down 1.10 points or less than a tenth of a percent to 42,865.77.
The downturn on Wall Street may have reflected profit taking after the early advance lifted the major averages to their best intraday levels in over three months.
The early strength in the markets came following the release of a closely watched Labor Department report showing U.S. consumer prices increased by slightly less than expected in the month of May.
The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.
Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.
The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.
Buying interest was also generated after U.S. and Chinese officials announced an agreement in principle on a framework to ease trade disputes between the two economic superpowers.
The plan is subject to approval by President Donald Trump and his Chinese counterpart Xi Jinping, Commerce Secretary Howard Lutnick told reporters.
Without specifying the terms of the framework, Lutnick indicated that both sides agreed to lift export controls on key goods and technologies.
In a subsequent post on Truth Social, Trump said the deal calls on China to supply full magnets and “any necessary rare earths” up front.
“WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,” Trump added. “RELATIONSHIP IS EXCELLENT!”
Airline stocks showed a substantial move to the downside over the course of the session, with the NYSE Arca Airline Index plunging by 3.4 percent.
Significant weakness also emerged among steel stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca Steel Index.
Housing and retail stocks also saw notable weakness as the day progressed, while energy stocks turned in a strong performance amid a surge by the price of crude oil.
Dow Jones, S&P, Nasdaq, Trade Uncertainty, Geopolitical Concerns May Weigh On Wall Street
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