Trade War Once Again in Focus on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a lower opening on Friday, with stocks likely to extend the pullback seen in the previous session.

Renewed trade war concerns may weigh on the markets after President Donald Trump indicated a willingness to impose tariffs on all Chinese imports to the U.S.

“I’m ready to go to 500,” Trump said in an interview with CNBC that aired this morning, apparently referring to the $505.5 billion of Chinese imports to the U.S. in 2017.

“I?’ not doing this for politics, I’m doing this to do the right thing for our country,” Trump said. “We have been ripped off by China for a long time.”

The Trump administration previously imposed tariffs of $34 billion worth of Chinese imports and has threatened to impose tariffs on another $200 billion worth of goods.

Trump argued the strength in the stock market since his election has allowed him to be more aggressive on trade, claiming, ?We?re playing with the bank?s money.”

Stocks moved mostly lower during trading on Thursday, giving back some ground after trending higher over the past several sessions. The major averages moved to the downside early in the session and remained stuck in the red throughout the day.

The major averages ended the day firmly in negative territory. The Dow slid 134.79 points or 0.5 percent to 25,064.50, the Nasdaq fell 29.15 points or 0.4 percent to 7,825.30 and the S&P 500 dropped 11.13 points or 0.4 percent to 2,804.49.

Profit taking contributed to the pullback on Wall Street, as some traders cashed in on the upward move seen in recent sessions.

Recent strength in the markets lifted the Nasdaq to a record closing high on Tuesday, while the S&P 500 ended the previous session at its best closing level in over five months. The Dow also reached a monthly closing high.

A negative reaction to disappointing earnings news from several big-name companies also weighed on the markets on the day.

Shares of eBay (EBAY) moved sharply lower after the e-commerce giant reported better than expected second quarter earnings but provided disappointing full-year guidance.

Insurance giant Travelers (TRV) also came under pressure after reporting second quarter earnings below analyst estimates.

Shares of American Express (AXP) also moved to the downside after the credit card giant reported second quarter earnings that beat expectations but on weaker than expected revenues.

On the other hand, shares of IBM Corp. (IBM) jumped after the tech giant reported second quarter results that exceeded analyst estimates on both the top and bottom lines.

Traders were also reacting to comments by President Donald Trump, who said in an excerpt of an interview with CNBC that he is “not thrilled” with interest rate hikes by the Fed.

“I’m not thrilled,” Trump said in the interview set to air in full on Friday. “Because we go up and every time you go up they want to raise rates again. I don’t really ? I am not happy about it.”

At the same time, Trump noted he is letting the Fed do “what they feel is best,” and a subsequent statement from the White House said the president respects the independence of the central bank.

Meanwhile, traders largely shrugged off a report from the Labor Department showing initial jobless claims unexpectedly dropped to their lowest level in almost five decades in the week ended July 14th.

The Labor Department said initial jobless claims fell to 207,000, a decrease of 8,000 from the previous week’s revised level of 215,000. Economists had expected jobless claims to inch up to 220,000.

With the unexpected decrease, jobless claims dropped to their lowest level since hitting 202,000 in December of 1969.

A separate report from the Conference Board also showed a slightly bigger than expected increase by its index of leading U.S. economic indicators in the month of June.

Steel stocks turned in some of the market’s worst performances on the day after moving sharply higher over the two previous sessions. Reflecting the weakness in the sector, the NYSE Arca Steel Index slumped by 2 percent.

Considerable weakness was also visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index both falling by 1.4 percent.

Pharmaceutical, telecom, and gold stocks also moved notably lower, while natural gas, real estate, and housing stocks moved to the upside.