Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a sharply lower opening on Wednesday, with stocks likely to move back to the downside following the rebound seen in the previous session.
News that China has issued a list of 106 U.S. products that will be subject to additional tariffs is likely to weigh on Wall Street.
The Chinese Ministry of Commerce said it plans to impose a 25 percent tariff on $50 billion worth of U.S. exports, including aircraft, cars, soybeans, and whiskey.
The announcement by China came shortly after the U.S. Trade Representative published a proposed list of products imported from China that could be subject to additional tariffs.
The publication of the list comes after President Donald Trump announced last month that he planned to impose about $50 billion in tariffs on Chinese goods over intellectual-property violations.
The USTR said the sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.
While critics have complained the administration?s policies risk starting a trade war, Trump argued in a post on Twitter that the war had already been lost.
?We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,? Trump tweeted.
He added, ?Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!?
The trade war concerns may overshadow the release of a report from payroll processor ADP showing stronger than expected private sector job growth in the month of March.
Following the sell-off seen on Monday, stocks showed a strong move back to the upside during trading on Tuesday. The major averages initially showed a lack of direction but climbed firmly into positive territory as the day progressed.
The major averages held on to notable gains going into the final hour of trading. The Dow soared 389.17 points or 1.7 percent to 24,033.36, the Nasdaq jumped 71.16 points or 1 percent to 6,941.28 and the S&P 500 surged up 32.57 points or 1.3 percent to 2,614.45.
Bargain hunting contributed to the strength on Wall Street, with traders picking up stocks at reduced levels after the sharp decline seen on Monday.
Concerns about a potential trade war contributed to the steep losses in the previous session, which pulled the Nasdaq and the S&P 500 down to their lowest closing levels in almost two months.
The markets also benefited from significant rebounds by some technology stocks, including electric car maker Tesla (TSLA).
After ending the previous session at its lowest closing level in a year, Tesla jumped by 6 percent as the company missed first quarter production targets but said it does not require an equity or debt raise this year.
Shares of Amazon (AMZN) also moved back to the upside on the day even though President Donald Trump continued to attack the online retail giant.
Meanwhile, traders were also looking ahead to the release of the Labor Department’s closely watched monthly employment report on Friday.
Reports on private sector employment, service sector activity, factory orders, and international trade may also attract attention in the coming days.
Energy stocks showed a significant move to the upside on the day, benefiting from a rebound by the price of crude oil. Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 2.3 percent and the NYSE Arca Oil Index jumped by 2.1 percent.
Considerable strength was also visible among semiconductor stocks, which regained ground following recent weakness. The Philadelphia Semiconductor Index advanced by 2 percent, bouncing off its lowest closing level in almost two months.
Tobacco, transportation, chemical, and banking stocks also saw notable strength, while gold stocks pulled back along with the price of the precious metal.
