U.S. Stocks May Extend Pullback Amid Ongoing Trade Concerns

(RTTNews) - Following the pullback seen during last Friday's session, stocks may see further downside in early trading on Monday. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 down by 0.2 percent.

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 import 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.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index dipped by 0.3 percent, while China's Shanghai Composite Index rose by 0.3 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is up by 0.4 percent, the French CAC 40 Index is down by 0.4 percent and the German DAX Index is down by 0.8 percent.

In commodities trading, 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.