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U.S. stock-index futures lost ground Thursday, falling after a drop in Asian shares as U.S.-China tensions continue to rise and as investors await another round of corporate earnings reports as well as data on retail sales and weekly jobless benefit claims.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, -0.57% fell 158 points, or 0.6%, to 26,607, while S&P 500 futures ES00, -0.59% were down 21.40 points, or 0.7%, at 3,198. Nasdaq-100 futures NQ00, -1.20% declined 150.5 points, or 1.4%, to 10,532.75.
The Dow DJIA, +0.85% on Wednesday rose 227.51 points, or 0.9%, to end at 26,870.10, while the S&P 500 SPX, +0.90% advanced 29.04 points, or 0.9%, to close at 3,226.56. The Nasdaq Composite COMP, +0.59% gained 61.91 points, or 0.6%, to finish at 10,550.49.
What’s driving the market?
Global equities were under pressure after Chinese stocks suffered their biggest one-day loss since the start of the coronavirus pandemic. Analysts said a continued rise in tensions between Beijing and Washington appeared to shake investor appetite for stocks and other risky assets.
The Trump administration is weighing a ban that would prevent members of the Chinese Communist Party and their families from traveling to the U.S., The New York Times reported. The Trump administration said Wednesday that it would ban travel for employees of Chinese technology group Huawei and other companies it deems complicit in helping Beijing crack down on human rights in the country. China recently imposed travel restrictions on some U.S. officials, including Senators Marco Rubio and Ted Cruz.
The U.S. – China tensions overshadowed upbeat economic data that saw China’s second-quarter gross domestic product expand 3.2% from a year ago, beating an analyst consensus estimate of 2%, and marking a bounce after a 6.8% rout in the first quarter. Analysts said other data from China, including an unexpected fall in retail sales, also dampened the response.
“China was the first nation to suffer from COVID-19 and go into lockdown. They are ahead of the West on the recovery curve. However, the cautious consumer could well be a signal of what we can expect across the U.K. or the U.S.,” said Fiona Cincotta, market analyst at CityIndex, in a note.
Read:Here’s the good news and bad news about China GDP data
The U.S. corporate earnings reporting season has so far largely cheered investors with results from big banks. Morgan Stanley and Bank of America Corp. report earnings Thursday.
The U.S. economic calendar features first-time jobless claims for the week ending July 11 at 8:30 a.m. Eastern. Economists surveyed by MarketWatch forecast the figure to come in at 1.24 million versus the previous week’s 1.31 million.
Separately, June retail sales are forecast to show a 5.4% increase after a 17.7% rebound in May.
Also due at 8:30 a.m., the July Philadelphia Fed index is forecast to fall to 18.1 from 27.5. The National Association of Home Builders index for July is due at 10 a.m. Eastern, as is data on May business inventories.
Which companies are in focus?
- Twitter Inc. TWTR, +3.75% shares slumped over 6% in premarket action after accounts belonging to top U.S. executives, lawmakers and celebrities were compromised Wednesday afternoon in what appeared to be an attempt to siphon bitcoin from social-media followers. Twitter said it believed the incident was “a coordinated social engineering attack by people who successfully targeted some of our employees with access to internal systems and tools.”
- Shares of Johnson & Johnson JNJ, +0.23% edged higher in premarket trade after earnings and revenues slumped but beat expectations, while the company also raised its guidance for 2020.
- Bank of America Corp. BAC, +1.90% shares were slightly lower in premarket action after the bank delivered results that topped Wall Street expectations.
What are other markets doing?
The Shanghai Composite Index SHCOMP, -4.49% fell 4.5% for its biggest one-day loss since Feb. 3, according to Dow Jones Market Data, while the CSI 300 Index 000300, -4.81% dropped 4.8%. Japan’s Nikkei 225 Index NIK, -0.76% fell 0.8%, while the Hang Seng Index HSI, -2.00% in Hong Kong lost 2%.
The pan-European Stoxx 600 Europe Index SXXP, -0.60% fell 0.7%, while London’s FTSE 100 Index UKX, -0.27% was off 0.5%.
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.614% was off 0.8 basis point at 0.621%. Bond yields and prices move in opposite directions.
The ICE U.S. Dollar Index DXY, +0.04%, a measure of the U.S. currency against a basket of six major rivals, was up 0.2%.
Oil futures CL.1, -1.04% were under pressure, while gold GC00, -0.30% also pulled back.
