Investing.com – U.S. stock futures pointed to a sharply lower open on Wall Street on Thursday, erasing earlier gains as trade tensions escalated after Beijing vowed to take “countermeasures” over U.S. plans to slap new tariffs on all remaining Chinese imports.
China’s finance ministry said in a statement Thursday it has to take “necessary countermeasures” against U.S. President Donald Trump’s planned tariffs on $300 billion of Chinese goods. The statement added that the tariffs violated a consensus reached by the leaders of both countries.
The escalation in the trade war came a day after a tweet by Trump that linked the dispute and Chinese President Xi Jinping’s handling of protests in Hong Kong.
Earlier this month Trump said the U.S. would impose tariffs on $300 billion of Chinese goods from Sept. 1, which would effectively cover all Chinese imports. He later said the new tariff would be deferred until Dec. 1 for around half of the goods affected.
The losses came after the Dow Jones Industrial Average’s worst day of the year on Wednesday, a day on which the U.S. Treasury yield curve inverted for the first time in 12 years.
Investors were looking ahead to U.S. economic reports due out later in the day amid heightened concerns over the economic outlook.
Retail sales for July, the Empire State manufacturing index and Philadelphia Fed manufacturing survey, as well as last week’s initial jobless claims and second-quarter unit labor costs all hit the wires at 8:30 AM ET (1230 GMT). Nationwide data for industrial and manufacturing output follow 45 minutes later, while the National Association of Home Builders’ Housing Market Index comes at 10 AM (1400 GMT).
Despite the gloomy news from China, there was better news closer to home as Walmart (NYSE:WMT) reported a stronger second quarter than expected and said its full-year profit would be at the top end of its previously announced range. The shares rose 5.8%, encouraged not least by a thumping 37% year-on-year rise in e-commerce sales.
–Reuters contributed to this report