Lingering Trade Worries May Weigh On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to come under pressure after ending last Thursday's trading little changed.

Lingering concerns about a global trade war are likely to weigh on Wall Street as traders await signs of progress on President Donald Trump's trade talks.

Potentially adding to the worries, China has threatened to retaliate against any countries that reach a trade deal with the U.S. at the expense of China's interests.

A spokesman for China's Ministry of Commerce was asked to respond to reports the Trump administration is preparing to put pressure on other countries to restrict trade with China in exchange for U.S. tariff exemptions.

"If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner," the spokesman responded, according to a Google translation. "China is determined and capable of safeguarding its own rights and interests."

Overall trading activity may be somewhat subdued, however, as traders look ahead to release of earnings news from several big-name companies later this week.

Tesla (TSLA), Boeing (BA), IBM Corp. (IBM), Alphabet (GOOGL) and Intel (INTC) are among the companies due to report their quarterly results in the coming days.

Traders are also likely to keep an eye on reports on durable goods orders and new and existing home sales, although any developments on the trade front are likely to remain in the spotlight.

Following the sell-off seen during Wednesday's previous session, stocks showed a lack of direction over the course of the trading day on Thursday. The Nasdaq and the S&P 500 spent the day bouncing back and forth across the unchanged line before eventually closing narrowly mixed.

While the Nasdaq edged down 20.71 points or 0.1 percent to 16,286.45, the S&P 500 inched up 7.00 points or 0.1 percent to 5,282.70.

The narrower Dow showed a more significant move to the downside, tumbling 527.16 points or 1.3 percent to 39,142.23.

For the holiday-shortened week, the S&P 500 slumped by 1.5 percent, while the Nasdaq and the Dow plunged by 2.6 percent and 2.7 percent, respectively.

The steep drop by the Dow on the day largely reflected a nosedive by shares of UnitedHealth (UNH), with the healthcare giant plummeting by 22.4 percent.

UnitedHealth tumbled to its lowest closing level in a year after the company reported weaker than expected first quarter earnings and cut its full-year profit forecast.

The lack of direction shown by the broader markets came amid lingering uncertainty about Trump's tariffs despite his upbeat comments about trade talks.

Trump said in a post on Truth Social on Wednesday that "big progress" had been made in a meeting with the Japanese trade delegation.

"Had a very productive call with the President of Mexico yesterday," he added in a post this morning. "Likewise, I met with the highest level Japanese Trade Representatives. It was a very productive meeting. Every Nation, including China, wants to meet! Today, Italy!"

In U.S. economic news, the Labor Department released a report unexpectedly showing a modest decrease by first-time claims for U.S. unemployment benefits in the week ended April 12th.

The report said initial jobless claims dipped to 215,000, a decrease of 9,000 from the previous week's revised level of 224,000.

Economists had expected initial jobless claims to inch up to 225,000 from the 223,000 originally reported for the previous week.

A separate report released by the Commerce Department showed new residential construction in the U.S. pulled back by much more than expected in the month of March.

Despite the lack of direction shown by the broader markets, pharmaceutical stocks moved sharply higher, resulting in a 3.8 percent spike by the NYSE Arca Pharmaceutical Index.

Eli Lilly (LLY) helped lead the sector higher, soaring by 14.3 percent after reporting positive results from a phase-three trial of a pill to treat weight loss and diabetes.

A continued surge by the price of crude oil also contributed to substantial strength among energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index jumping by 3.9 percent and 2.7 percent, respectively.

Transportation, telecom and housing stocks also saw considerable strength on the day, while gold stocks moved lower along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are tumbling $1.61 to $63.07 a barrel after surging $2.21 to $64.68 a barrel last Thursday. Meanwhile, after sliding $18 to $3,328.40 an ounce in the previous session, gold futures are jumping $83.10 to $3,411.50 an ounce.

On the currency front, the U.S. dollar is trading at 140.97 yen versus the 142.18 yen it fetched on Friday. Against the euro, the dollar is trading at $1.1525 compared to last Friday's $1.1393.

Asia

Asian stocks were mixed in thin holiday trading on Monday, with markets in Hong Kong, Australia and New Zealand closed due to the Easter holiday.

The U.S. dollar tumbled after U.S. President Donald Trump threatened to fire Fed Chair Powell over rate cuts and released an eight-point list targeting what he calls "non-tariff cheating" by foreign nations -- a warning he said could affect diplomatic and trade ties with the United States.

White House economic adviser Kevin Hassett said on Friday that the president and his team are examining the legal feasibility of removing Powell and claimed that he had acted politically to benefit Democrats.

Just a day before, Trump blasted Powell on for not lowering interest rates, calling him "always TOO LATE AND WRONG."

Meanwhile, U.S.-China relations continued to sour, with China's Commerce Ministry saying it would retaliate against nations cooperating with the U.S.'s tariff wars.

Oil prices fell over 1 percent in Asian trading on demand concerns. Gold continued its upward trend as escalating global trade tensions and a weaker dollar boosted demand for the precious metal.

Bullion was up more than 2 percent in Asian trading, nearing $3,400 per ounce after Trump's social media post highlighted the crucial role of gold in global economic and political dynamics.

In a post on Truth Social, the president declared, "THE GOLDEN RULE OF NEGOTIATING AND SUCCESS: HE WHO HAS THE GOLD MAKES THE RULES."

China's Shanghai Composite Index rose 0.5 percent to 3,291.43 as the People's Bank of China kept its loan prime rates unchanged, continuing its trend from last year.

Japanese markets fell sharply as the yen strengthened to its highest level since September against a broadly weaker U.S. dollar amid cautiousness over the U.S.-China trade tensions.

The Nikkei 225 Index tumbled 1.3 percent to 34,279.92, while the broader Topix Index settled 1.2 percent lower at 2,528.93.

Export-related stocks were hit hard ahead of currency talks between Japanese and U.S. finance chiefs later this week. Toyota Motor shed 2.9 percent and Suzuki Motor lost 3.9 percent.

Seoul stocks edged up slightly, with the Kospi closing up 0.2 percent at 2,488.42 to extend gains for a third day running, even as preliminary April data revealed significant declines in shipments to the U.S. and China, clouding the growth outlook for the Asian export powerhouse.

Europe

The major European markets are closed on the day in honor of Easter Monday.

U.S. Economic News

The Conference Board is scheduled to release its report on leading economic indications in the month of March at 10 am ET. The leading economic index is expected to decrease by 0.5 percent in March after falling by 0.3 percent in February.