After a tariff increase takes effect, U.S. stock futures slip
On Friday U.S. stock futures fell and Asian shares pared gains after U.S. President Donald Trump’s tariff increase on $200 billion worth of Chinese goods took effect, ratcheting up tensions between the world’s two biggest economies.
E-mini futures for U.S. S&P500 slipped after the higher tariffs kicked in, and were last down 0.5% in volatile trade.
The White House has said that both sides would resume negotiations on Friday morning in Washington after concluding the first of two days of talks on Thursday in an effort to rescue the trade deal that is close to collapse on this time. Trump also said he was taking steps to authorize new tariffs on $325 billion in Chinese imports.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%, by reason of gains in Chinese shares. The Shanghai composite rose as much as 3.1% early on Friday before paring much of that gain, leaving it up 1.5%. Japan’s Nikkei fell 0.7%.
Most markets were down on fears about China-U.S. tensions during the week. The S&P500 futures were down 2.8%, the Shanghai index down 6.0%, the Nikkei 4.3% and ex-Japan Asia MSCI 4.3%.
The euro firmed slightly to $1.1226 while the Chinese yuan perked at 6.837 per dollar having hit a 4-month low of 6.8638 to the dollar the day before.
MSCI’s emerging market currency index also tumbled to its 4-month low.
Oil prices erased much of the gains that were made after Trump’s comments on Chinese President Xi Jinping`s letter raised hopes for a deal. Brent rose 0.2% to $70.51a barrel while U.S. West Texas Intermediate (WTI) crude gained 0.4% to $61.96.