Futures Pointing To Extended Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly lower open on Monday, with stocks likely to see further downside following the pullback seen during last Friday's session.

Ongoing concerns about President Donald Trump's trade war may weigh on markets after he sent letters to leaders of the European Union and Mexico threatening to impose 30 percent tariffs beginning August 1st.

Trump claimed in a post on Truth Social early this morning that the U.S. has been "ripen off" on trade for decades, costing the country trillions of dollars.

"Countries should sit back and say, 'Thank you for the many year's long free ride, but we know you now have to do what's right for America,'" Trump said. "We should respond by saying, 'Thank you for understanding the situation we are in. Greatly appreciated!'"

Meanwhile, the EU announced it will suspend the implementation of its trade countermeasures against the U.S. until early August to allow more time for a negotiated settlement to the issue.

Responding to Trump's letter at a news conference on Sunday, European Commission president Ursula von der Leyen said, "We will therefore also extend the suspension of our countermeasures till early August. At the same time, we will continue to prepare further countermeasures so we are fully prepared."

"We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now till the 1st of August (to negotiate)," she told reporters in Brussels.

EU's retaliatory tariff on $25 billion worth of American goods for the 25 percent import duty that the U.S. imposed on steel and aluminum imports from Europe was set to come into force Monday.

However, traders may be reluctant to make significant moves ahead of the release of some key economic data in the coming days, including reports on consumer and producer prices, retail sales and industrial production.

Earnings season also picks up steam this week, with Citigroup (C). JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), Goldman Sachs (GS), Johnson & Jonson (JNJ) and Netflix (NFLX) among the big name companies due to report their quarterly results.

After coming under pressure early in the session, stocks regained some ground over the course of the trading day on Friday but still closed modestly lower. The major averages all moved to the downside, with the Nasdaq and the S&P 500 pulling back off Thursday's record closing highs.

The Dow slid 279.13 points or 0.6 percent to 44,371.51, the Nasdaq slipped 45.14 points or 0.2 percent to 20,585.53 and the S&P 500 fell 20.71 points or 0.3 percent to 6,259.75.

The weakness on Wall Street came amid renewed concerns about President Donald Trump's escalating trade battles.

In a letter to Canadian Prime Minister Mark Carney posted on Truth Social, Trump announced a 35 percent tariff on Canadian imports effective August 1st.

Trump said the tariffs were partly due to Canada's failure to stop fentanyl from "pouring" into the U.S. and threatened to raise tariffs further if Canada retaliates.

"If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter," Trump said.

Trump also told NBC News' "Meet the Press" moderator Kristen Welker he plans to impose blanket tariffs of 15 or 20 percent on most U.S. trade partners,

The president also indicated he soon plans to send letters to member of the European Union notifying them of new tariff rates.

Overall trading activity appeared somewhat subdued, however, as a lack of major U.S. economic data may have kept some traders on the sidelines.

Airline stocks pulled back sharply after soaring in the previous session, dragging the NYSE Arca Airline Index down by 2.7 percent. The index ended Thursday's trading at a four-month closing high.

Considerable weakness was also visible among biotechnology stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca Biotechnology Index.

Networking, housing and pharmaceutical stocks also saw notable weakness, while gold stocks showed a strong move to the upside along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are climbing $0.98 to $69.43 a barrel after surging $1.88 to $68.45 a barrel last Friday. Meanwhile, after jumping $38.30 to $3,364 an ounce in the previous session, gold futures are inching up $2.40 to $3,366.40 an ounce.

On the currency front, the U.S. dollar is trading at 147.29 yen versus the 147.43 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1684 compared to last Friday's $1.1689.

Asia

Asian stocks ended mixed on Monday despite U.S. President Donald trump intensifying his trade war with threats of 30 percent tariffs on the European Union and Mexico. Chinese export growth beat expectations in June, helping limit regional losses, if any.

The dollar held steady in Asian trading and gold climbed above $3,370 per ounce, while oil prices jumped more than 1 percent ahead of expected U.S. sanctions on Russia that may affect global supplies.

China's Shanghai Composite Index rose 0.3 percent to 3,519.65 as customs data showed China's overall exports jumped 5.8 percent in June year-on-year in U.S. dollar terms. Imports grew 1.1 percent from a year earlier, rising the first time this year.

China's exports of rare earths surged 60.3 percent in June from a year earlier and rose 32 percent from the previous month, indicating a push by global buyers to get hold of the materials used to make powerful magnets.

Hong Kong's Hang Seng Index climbed 0.3 percent to 24,203.32 ahead of Chinese retail sales, industrial output and gross domestic product due on Tuesday.

Japanese markets ended slightly lower due to ongoing uncertainty over unresolved trade talks with the U.S. and apprehensions surrounding upcoming domestic election.

Investors also reacted to weak government data that showed Japan's core machinery orders fell 0.6 percent in May from the previous month.

The Nikkei 225 Index slipped 0.3 percent to 39,459.62, extending losses for a third consecutive session. The broader Topix Index settled marginally lower at 2,822.81.

Seoul markets rose notably as shares of consumer goods and retailers surged ahead of the planned distribution of the government-led cash handouts.

The Kospi rallied 0.8 percent to 3,202.03, surpassing the 3,200-point line for the first time in nearly four years. Lotte Shopping, Shinsegae and AmorePacific jumped 3-7 percent.

Australian stocks ended slightly lower, with industrials, consumer discretionary and utility stocks leading losses amid Trump's tariff threats.

The benchmark S&P/ASX 200 Index dipped 0.1 percent to 8,570.40, while the broader All Ordinaries Index ended little changed at 8,815.30.

Gold miners performed well, with Evolution Mining, Resolute Mining, Northern Star Resources and Newmont rising around 2 percent each.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 ended little changed at 12,678.69 after the country's services sector showed mild improvement in June.

Europe

European stocks have drifted lower on Monday after U.S. President Donald Trump threatened to impose a 30 percent tariff on European Union goods, raising concerns over a prolonged and deeper economic slowdown.

Media reports suggest that the European Union has prepared a €21 billion ($24.52 billion) tariff package targeting American goods if trade talks between the two sides collapsed.

The pan European STOXX 600 Index is down 0.3 percent after falling 1 percent on Friday.

The German DAX Index is down 0.8 percent and France's CAC 40 Index is down 0.4 percent, while the U.K.'s FTSE 100 Index has bucked the downtrend and climbed 0.4 percent.

Automakers tumbled, with BMW, Mercedes-Benz, Volkswagen and Porsche all falling around 2 percent.

Mining giant BHP rose about 1 percent after signing preliminary deals with China battery giants CATL and BYD to explore opportunities in battery technology and electrification.

AstraZeneca gained 2 percent in London after its experimental drug baxdrostat proved to be successful in lowering high blood pressure in a late-stage study.

French defense-related stocks were rising after President Emmanuel Macron on Sunday called for a massive boost to France's defense spending, citing a greater threat from Russia.

U.S. Economic News

No major U.S. economic data is scheduled to be released today.