Wall Street Set To Open Lower Amid Lingering Trade Uncertainty

EU Tariffs

Trump administration threatens EU with tariffs on another $4B of goods

U.S. equity futures pointed to a lower open on Tuesday after the U.S. said Monday it could hit the European Union with tariffs on another $4 billion worth of goods in retaliation for the bloc’s subsidies to aerospace giant Airbus.

The U.S. government has been embroiled in a row with the EU since 2004 over Boeing Co (NYSE: BA) and Airbus. The items set to be affected by the tariffs include European cheeses, hams, pasta, sausages, and olives, according to a statement issued by the office of U.S. Trade Representative (USTR) on Monday.

As of 5:49 a.m. ET, futures on the blue-chip Dow were down 27 points, or 0.10% to 26,673. Futures on the tech-heavy Nasdaq 100 declined 16 points, or 0.21% to 7,774 while those on the broader S&P 500 dropped 2.87 points, or 0.1% to 2,964.88.

Trump changes tone on renewed U.S.-China trade talks

President Trump told reporters in the Oval Office on Monday that trade talks with Chinese authorities have already begun and were being held by phone. The president, however, warned that any trade deal with China would need to be “somewhat tilted” in the favor of the U.S.

Global markets rallied on Monday after the president and his Chinese counterpart Xi Jinping, agreed to resume trade talks following their face-to-face meeting at the G20 summit over the weekend in Osaka, Japan.

Oil drifts lower on global economic concerns

Oil prices slumped on Tuesday as markets feared that slowing global economy could dent demand growth. The drop came as OPEC members agreed on Monday to extend oil supply cuts by nine months to try to support prices.

“It was the bare minimum OPEC could agree on in order to prevent a major meltdown in prices. Member countries noted that global oil demand growth for this year has fallen to 1.14 mbpd whilst non-OPEC supply is expected to grow by 2.14 mbpd,” Yahoo Finance quoted PVM analyst Tamas Varga as saying.

As of 4:45 a.m. ET, Brent crude futures were down $0.18, or 0.28%, to $64.88 a barrel, while U.S. crude futures fell $0.20, or 0.34% to $58.89 a barrel.