U.S. stock index futures were sharply lower Monday morning, as market participants monitor an intensifying trade dispute between the world’s two largest economies.
Market focus is largely attuned to global trade developments, amid growing fears that Washington’s latest tariff threats against Mexico could tip the global economy into a recession.
Tensions between the U.S. and China escalated over the weekend, as the two countries clashed over trade, technology and security issues.
A senior Chinese official and trade negotiator said Sunday that Washington would not be able to use pressure to force a trade deal on Beijing. Vice Commerce Minister Wang Shouwen also refused to say whether the leaders of both countries would meet at the G20 summit to work out an agreement later this month.
On the data front, a final reading of manufacturing PMI (Purchasing Managers’ Index) data for May will be released at around 9:45 a.m. ET. The Institute for Supply Management (ISM) manufacturing index for May, construction spending figures for April and latest light vehicle sales data will all follow slightly later in the session.
On Friday, the Dow tumbled more than 350 points after President Donald Trump said the U.S. would impose a 5% tariff on all Mexican imports from June 10. The Trump administration has threatened to raise those charges up to 25% over the coming months if Mexico does not take significant action in stopping migrants reaching the southern border.
Friday’s declines added to a torrid week and month for stocks. The Dow dropped 3% last week and notched its sixth straight weekly loss. That’s the longest weekly losing streak for the Dow since 2011. The S&P 500 and Nasdaq posted their fourth straight weekly loss. The major indexes also snapped a four-month winning streak.