By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Friday, with stocks likely to see further downside after moving sharply lower over the course of the two previous sessions.
Concerns about the outlook for the global economy may continue to weigh on the markets after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.
The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has been a dark cloud over the global economy for over a year.
Traders are also digesting a closely watched Labor Department report showing U.S. job growth slowed in the month of July but came in line with economist estimates.
After moving significantly higher over the course of morning trading on Thursday, stocks pulled back sharply after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow jumped more than 300 points in morning trading but ended the day down 280.85 points or 1.1 percent at 26,583.42.
The tech-heavy Nasdaq also slid 64.30 points or 0.8 percent to 8,111.12 and the S&P 500 slumped 26.82 points or 0.9 percent to 2,953.56.
With the downturn, the major averages extended the steep drop seen late in the previous session, ending the day at their worst closing levels in a month.
The afternoon pullback came as Trump announced his plans to impose new tariffs on Chinese goods in a series of posts on Twitter.
Trump revealed the plan shortly after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin wrapped up the latest round of trade talks in Shanghai.
“Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal,” Trump tweeted. “We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing.”
Trump accused China of failing to follow through on pledges to buy large quantities of U.S. agricultural products and stop the sale of Fentanyl to the U.S.
“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” Trump said.
He added, “We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”
Trump noted that products targeted by the new tariffs do not include the $250 billion worth of Chinese goods already being tariffed at 25 percent.
The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has led to increasing concerns about the outlook for the global economy.
The Federal Reserve’s decision to cut interest rates by a quarter point on Wednesday was partly due to the potential impact of the ongoing trade dispute.
Stocks had rallied earlier in the session as weaker than expected U.S. economic data resurrected investors’ hopes for future interest rate cuts.
Shortly after the start of trading, the Institute for Supply Management released a report unexpectedly showing a continued slowdown in the pace of growth in U.S. manufacturing activity in the month of July.
The ISM said its purchasing managers index dipped to 51.2 in July after edging down to 51.7 in June. While a reading above 50 still indicates growth in manufacturing activity, economists had expected the index to inch up to 52.0.
With the continued decrease, the purchasing managers index dropped to its lowest level since hitting 49.6 in August of 2016.
A separate report from the Commerce Department showed U.S. construction spending plunged by 1.3 percent to in June after falling by 0.5 percent in May.
The data reignited optimism about future rate cuts that was dashed by yesterday’s comments from Federal Reserve Chairman Jerome Powell.
The Fed cut interest rates as expected on Wednesday, but Powell spooked the markets by suggesting the move may not be the first in a series of rate cuts.
Energy stocks saw substantial weakness on the day, moving sharply lower along with the price of crude oil. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index plunged by 5.5 percent and 4.9 percent, respectively.
Significant weakness also emerged among banking stocks, as reflected by the 3.7 percent nosedive by the KBW Bank Index.
Steel, transportation, semiconductor and networking stocks also came under considerable selling pressure over the course of the session.
On the other hand, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 5.2 percent. The strength in the sector came as the price of the precious metal rallied in extended trading.
Adedapo Adesanya 
Dipo Olowookere