Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a sharply lower opening on Wednesday, with stocks likely to give back ground after trending higher in recent sessions.
Concerns about the economic impact of a global trade war are likely to weigh on the markets after President Donald Trump?s administration proposed new tariffs on China.
Trump has ordered U.S. Trade Representative Robert Lighthizer to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.
The move comes after the U.S. imposed a 25 percent tariff on $34 billion worth of Chinese imports last Friday, leading China to retaliate by imposing tariffs on $34 billion worth of U.S. exports.
?For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,? Lighthizer said. ?We have been very clear and detailed regarding the specific changes China should undertake.?
?Unfortunately, China has not changed its behavior ? behavior that puts the future of the U.S. economy at risk,? he added. ?Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action.?
China has vowed to take countermeasures in response to the new tariffs, which will not effect until after a two-month review process.
Following the rally seen on Monday, stocks saw some further upside during trading on Tuesday. With the upward move on the day, the S&P 500 reached its best closing level in five months.
The major averages all closed in positive territory, although the Nasdaq inched up just 3.00 points or less than a tenth of a percent to 7,759.20. The Dow climbed 143.07 points or 0.6 percent to 24,919.66 and the S&P 500 rose 9.67 points or 0.4 percent to 2,793.84.
The continued strength on Wall Street came as optimism about the upcoming earnings season overshadowed recent trade concerns.
Snack food and beverage giant PepsiCo (PEP) released its second quarter results before the start of trading, reporting earnings that exceeded analyst estimates.
Financial giants Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) are due to report their quarterly results before the start of trading on Friday.
Another light day on the U.S. economic front kept some traders on the sidelines, however, with closely watched reports on producer and consumer price inflation due to be released in the coming days.
Oil service stocks showed a strong move to the upside on the day, driving the Philadelphia Oil Service Index up by 1.1 percent. The strength among oil service stocks came amid an increase by the price of crude oil.
Chemical, semiconductor, and utilities stocks also turned in strong performances, while most of the other major sectors showed more modest moves.
