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 market is basically in a limbo. There happens to be a wall of worries that continues to grow,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“It’s essentially the same worries that have been in the markets for a while now. People realize that this is not an easy trade war to win and there could be some real negative consequences from this.”
The uncertainty in markets has sent investors seeking for safe-haven assets, with yields on the U.S. 10-year notes hitting its lowest level since October 2017.
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 tariffs imposed on Chinese imports.
The benchmark S&P 500 index as of Friday’s close was about 4% off its record high hit on May 1, while the blue-chip Dow Jones Industrial index posted its fifth straight week of decline.
At 8:18 a.m. ET, Dow e-minis were up 33 points, or 0.13%. S&P 500 e-minis were up 1.25 points, or 0.04% and Nasdaq 100 e-minis were up 14.75 points, or 0.2%.
Among other stocks, Activision Blizzard Inc rose 3.3% in premarket trading after Goldman Sachs upgraded its stock to “buy” and said the videogame publisher would benefit from its recent game releases.
FedEx Corp fell 0.4% after Chinese telecoms equipment maker Huawei Technologies Co Ltd said it was 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.
Global Payments Inc dropped 2.2% after the payment technology company said it would buy peer Total System Services Inc for about $21.5 billion in stock. Total System’s shares rose 2.3%.
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 and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D’Silva