Friday March 2nd

2-03-2018

Dow is headed for a more than 150-point drop, extending the sell-off after Trump announced tariffs

U.S. stock index futures fell ahead of Friday's open. Around 7 a.m. ET, Dow futures were indicating a drop of more than 150 points at the open. The Nasdaq and S&P 500 futures pointed to a negative open for their respective markets. The moves in U.S. futures came after Wall Street finished deep in the red during the previous trading session. On Thursday, the Dow Jones industrial average tumbled 420 points by the market close, as investors reacted to news coming out of the central banking and political spheres. Newly-appointed Fed Chair Jerome Powell spoke again Thursday to the Senate Committee on Banking about monetary policy and the state of the U.S. economy. He said there were currently no "decisive" signs of wage inflation, just days after he stated that the central bank could raise interest rates three or more times during 2018 to prevent the U.S. economy from overheating. Also Thursday, President Donald Trump said the U.S. would be imposing new tariffs on aluminum and steel. He is expected to set tariffs, as early as next week, of 25 percent on steel and 10 percent on aluminum, putting pressure on companies both domestic and international. The move was roundly condemned, including by European Commission President Jean-Claude Juncker, who said it "can only aggravate matters." Consequently, markets overseas were trading deep in the red Friday. Trump stuck to his guns on Friday, tweeting: "When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win." In data, consumer sentiment is due out at 10 a.m. ET. No speeches by the U.S. Federal Reserve are due to take place Friday. Asian stocks closed lower on Friday, with steel producers and automaker names recording steep drops. The fall in regional markets tracked sharp losses on Wall Street following a tariff announcement from U.S. President Donald Trump. In Tokyo, the benchmark Nikkei 225 fell 542.83 points, or 2.5 percent, to end at 21,181.64, as the yen firmed. Elsewhere, the Kospi declined 1.04 percent to finish at 2,402.16, with technology and manufacturing stocks mostly trading lower. Greater China markets followed regional markets lower, with Hong Kong's Hang Seng Index falling 1.41 percent by 3:00 p.m. HK/SIN. Mainland markets saw more moderate declines than their regional peers. The Shanghai composite closed 0.59 percent lower at 3,254.58 and the Shenzhen composite slipped 0.64 percent. U.S. oil prices fell on Friday, taking declines to a fourth day as Asian share markets extended a sell-off on Wall Street after news of planned U.S. tariffs on steel and aluminium raised fears of a trade war. Brent crude was down 2 cents at $63.81 at 0740 GMT after spending most of the session slightly higher. The contract settled down 1.4 percent on Thursday, a two-week low. Brent is set for a weekly fall of 5.2 percent. U.S. West Texas Intermediate (WTI) crude was down 11 cents, or 0.2 percent, at $60.88 after also touching a two-week low of $60.18 a day earlier. Gold prices rose slightly on Friday as the dollar eased on fears of an imminent trade war following U.S. President Donald Trump's decision to impose steep tariffs on imported steel and aluminium. Spot gold had risen by 0.1 percent to $1,317.29 an ounce by 0757 GMT, but was on track for a second straight weekly drop after having declined 0.9 percent so far. Prices fell to the lowest since Jan. 2, at $1,302.61, in the previous session under pressure from expectations of more interest rate hikes in the United States than expected this year. U.S. gold futures were up 1 percent at $1,318.5 per ounce on Friday.