The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a lower open on Monday, with stocks likely to move to the downside after ending last Friday’s volatile session little changed.
Renewed trade concerns are likely to weigh on the markets amid further signs of rising tensions between the U.S. and China.
China on Monday pushed back against President Donald Trump’s claims that it had broken the Geneva trade agreement, accusing the U.S. of violating the deal with increased tech export restrictions and the revocation of Chinese student visas.
“These practices seriously violate the consensus reached by the two heads of state on January 17, seriously undermine the existing consensus of the Geneva economic and trade talks, and seriously damage China’s legitimate rights and interests,” a Chinese Ministry of Commerce spokesperson said.
A collapse of the U.S.-China trade agreement could lead to considerable weakness among stocks, which have shown a considerable recovery since Trump’s “reciprocal tariff” announcement in early April.
The Trump administration has also announced it will double the current tariff rate on steel and aluminum imports from 25 percent to 50 percent.
Stocks shook off a sluggish start on Friday, with the major averages posting a mild recovery to finish mixed and little changed.
The Dow inched up 54.34 points or 0.1 percent to finish at 42,270.07, while the Nasdaq slipped 62.11 points or 0.3 percent to close at 19,113.77 and the S&P 500 eased 0.48 points or less than a tenth of a percent to end at 5,911.69.
The early selling pressure on Wall Street came after President Donald Trump accused China of violating the trade agreement reached last month.
Trump said in a post on Truth Social that “everything quickly stabilized and China got back to business as usual” following the trade deal.
“Everybody was happy! That is the good news!!!” Trump said. “The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”
However, bargain hunters fueled the mild recovery later in the day.
In U.S. economic news, a closely watched report release by the Commerce Department showed consumer prices in the U.S. crept slightly higher in the month of April.
The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in April after coming in unchanged in March. The uptick matched economist estimates.
The report also said the annual rate of growth by the PCE price index slowed to 2.1 percent in April from 2.3 percent in March. Economists had expected growth to slow to 2.2 percent.
Excluding prices for food and energy, the core PCE price index still crept up by 0.1 percent in April following a revised 0.1 percent uptick in March. The modest increase came in line with expectations.
The annual rate of growth by the core PCE price index slowed to 2.5 percent in April from 2.7 percent in March, matching economist estimates.
The Federal Reserve’s preferred readings on consumer price inflation were included in the Commerce Department’s report on personal income and spending.
The Commerce Department said personal income increased by 0.8 percent in April after climbing by 0.7 percent in March, while personal spending rose by 0.2 percent in April after rising by 0.7 percent in March.
Dow Jones, S&P, Nasdaq, Rising Trade Tensions May Weigh On Wall Street
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