Futures lower as U.S.-China trade tensions resurface

(Reuters) – U.S. stock index futures dipped on Tuesday following a rally in the previous session after President Donald Trump said he would go ahead with additional tariffs on Chinese goods, dampening hopes of resolving the ongoing trade dispute.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 26, 2018. REUTERS/Brendan McDermid

In the run up to the G20 Summit later this week, Trump said in an interview with the Wall Street Journal he expects to raise tariffs on $200 billion in Chinese imports to 25 percent from 10 percent, calling it “highly unlikely” that he would accept China’s request to hold off on the increase.

Apple Inc (AAPL.O) fell 1.5 percent in premarket trading after Trump said that tariffs could also be placed on laptops and iPhones imported from China.

Other FAANG members and technology stocks, including chipmakers which have the highest revenue exposure to China among S&P 500 companies, also declined.

Applied Materials Inc (AMAT.O) fell 1.5 percent, Micron Technology Inc (MU.O) 1.6 percent and Nvidia Corp (NVDA.O) 0.8 percent.

The downbeat sentiment comes after Wall Street started off the week on a high note, partly helped by retail stocks gaining on the hopes of a robust holiday season.

At 6:56 a.m. ET, Dow e-minis 1YMc1 were down 54 points, or 0.22 percent. S&P 500 e-minis ESc1 were down 7.5 points, or 0.28 percent and Nasdaq 100 e-minis NQc1 were down 32 points, or 0.48 percent.

General Motors Co (GM.N) fell 1.4 percent after the carmaker’s plans to close an assembly plant and a transmission plant in Ohio drew criticism from Trump.

Federal Reserve Vice Chairman Richard Clarida is set to speak at an event in New York at 8:30 a.m. ET (1330 GMT) and Fed Chairman Jerome Powell is scheduled to speak on Wednesday.

The commentary from the Fed policymakers could offer insights on the path of future interest rate hikes. Market watchers have also been anxious to know the Fed’s view on signs of slowing economic growth.

On the macro front, the U.S. Conference Board is expected to report that its consumer confidence index slipped to 135.9 in November from a reading of 137.9 in the prior month.

Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur

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