By Investors Hub
The major U.S. index futures are pointing to a higher opening on Thursday, with stocks likely to move back to the upside following the pullback seen in the previous session.
The upward momentum on Wall Street comes amid easing trade war concerns after news of U.S. threats of a new 10 percent tariff on $200 billion worth of Chinese imports contributed to the weakness on Wednesday.
China vowed to take countermeasures in response to the new tariffs, although the markets may respond positively to the lack of the announcement of specific retaliation by the Chinese.
Traders also seem optimistic the continued tariff threats will eventually bring the U.S. and China to the table for talks that could result in a long-term trade agreement.
After trending higher over the past several sessions, stocks gave back some ground during trading on Wednesday amid renewed trade concerns. With the drop on the day, the S&P 500 pulled back off its best closing level in five months.
The major averages ended the session firmly in negative territory but off their worst levels of the day. The Dow slumped 219.21 points or 0.9 percent to 24,700.45, the Nasdaq fell 42.59 points or 0.6 percent to 7,716.61 and the S&P 500 slid 19.82 points or 0.7 percent to 2,774.02.
The weakness on Wall Street came amid renewed concerns about the economic impact of a global trade war 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.”
In U.S. economic news, the Labor Department released a report showing producer prices increased by slightly more than expected in the month of June.
The Labor Department said its producer price index for final demand rose by 0.3 percent in June after climbing by 0.5 percent in May. Economists had expected prices to edge up by 0.2 percent.
Excluding food and energy prices, core producer prices also climbed by 0.3 percent in June, matching the increase seen in May. Core prices had been expected to rise by 0.2 percent.
Compared to the same month a year ago, producer prices were up by 3.4 percent in June, representing the largest 12-month increase since a 3.7 percent jump in November of 2011.
Gold stocks moved sharply lower over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 2.9 percent. The weakness among gold stocks came amid a notable decrease by the price of the precious metal.
Substantial weakness was also visible among steel stocks, as reflected by the 2.8 percent drop by the NYSE Arca Steel Index. The index pulled back after closing higher for four straight sessions.
Energy stocks also came under pressure on the day amid a steep drop by the price of crude oil. Semiconductor, telecom and computer hardware stocks also saw considerable weakness, moving lower along with most of the other major sectors.
Adedapo Adesanya