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US STOCKS-China's tariff blow sets Wall St for lower open ahead of Powell speech

Published 23/08/2019, 14:07
Updated 23/08/2019, 14:10
© Reuters.  US STOCKS-China's tariff blow sets Wall St for lower open ahead of Powell speech

© Reuters. US STOCKS-China's tariff blow sets Wall St for lower open ahead of Powell speech

(For a live blog on the U.S. stock market, click LIVE/ or

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* Futures down: Dow 0.48%, S&P 0.45%, Nasdaq 0.59%

* China unveils retaliatory tariffs on U.S. goods

* Powell's speech to start at 10:00 a.m. ET

* HP Inc (NYSE:HPQ) falls after CEO exit, disappointing forecast

* Foot Locker (NYSE:FL) slumps after quarterly results miss estimates

(Changes comment, adds details; Updates prices)

By Akanksha Rana

Aug 23 (Reuters) - Wall Street was set to open lower on

Friday as China's threat to impose tariffs on $75 billion worth

of U.S. goods ratcheted up trade tensions ahead of a highly

anticipated speech by Federal Reserve Chair Jerome Powell.

China's commerce ministry said it would impose additional

tariffs on a total of 5,078 U.S. products that include

agricultural products, crude oil, small aircraft and cars.

Tariffs on some products would take effect on Sept. 1 and others

on Dec. 15. Shares of oil majors Exxon Mobil Corp (NYSE:XOM) XOM.N and Chevron (NYSE:CVX)

Corp CVX.N fell more than 1% in premarket trading, while those

of carmakers General Motors Co (NYSE:GM) GM.N and Ford Motor (NYSE:F) Co F.N

dropped about 2%. Business jets maker Textron Inc (NYSE:TXT) TXT.N was

down 3.3%.

"Of course China is going to retaliate. That is part of the

trade war," said Scott Brown, chief economist at Raymond James,

in St. Petersburg, Florida.

"Trade issues are going to be important heading into the

Powell speech and he has to give some indication on how the

global environment is influencing the Fed."

Powell speaks at 10 a.m. ET (1400 GMT) in Jackson Hole and

investors will be looking for confirmation that the central bank

will cut interest rate next month against the backdrop of

increasing risks for the economy, especially from the ongoing

trade war.

The minutes of the Fed's meeting in July, issued earlier

this week, showed policymakers were in doubt about whether a new

cycle of rate cuts was justified.

Investors are hoping Powell will sound more convinced when

he speaks although most analysts were playing down the chance of

a strong commitment on more cuts.

At 8:41 a.m. ET, Dow e-minis 1YMcv1 were down 126 points,

or 0.48%. S&P 500 e-minis EScv1 were down 13.25 points, or

0.45% and Nasdaq 100 e-minis NQcv1 were down 45.75 points, or

0.59%.

After three straight week of declines, the main Wall Street

indexes are on course to end the week higher thanks to signs

that U.S. consumer demand remains strong.

Also crucial to the positive mood this week is the

assumption that the Fed and other central banks, as well as some

governments, are ready to take more action to stave off any risk

of a slide into recession in the months ahead.

HP Inc HPQ.N slipped 9.2% after Chief Executive Officer

Dion Weisler stepped down and the PC maker forecast

fourth-quarter profit below analysts' estimates. Foot Locker Inc FL.N tumbled 12.4% after the footwear

retailer missed estimates on second-quarter revenue and profit.

The disappointing earnings also pulled shares of Nike Inc (NYSE:NKE)

NKE.N , its major supplier, down 0.8%. In a bright spot, Salesforce.com Inc (NYSE:CRM) CRM.N gained 6.2%

premarket after cloud-based service provider forecast

third-quarter and full-year revenue above Wall Street estimates.

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