Trump's tariff threat hits Wall Street for the second day of Reuters

By Amy Caren Daniel

(Reuters) – US stock index futures slipped on Friday, following an escalation in trade tensions with China renewed fears of a global economic downturn, ahead of a closely monitored labor report.

President Donald Trump's threat to strike a $ 10 billion US $ 10 billion tariff on Chinese imports from next month sent global markets tumbling overnight and investors fleeing for perceived security paradoxes such as US government bonds and the Japanese yen.

China on Friday said it would not be extorted and warned of retaliation.

"The negative mood across markets suggests that investors are annoying," Lukman Otunuga, senior research analyst at FXTM, said in a note, warning again of the potential impact on growth.

Industrial bellwethers Boeing Co (N 🙂 and Caterpillar Inc (N 🙂 fell 0.5% and 1[ads1]% respectively in premarket trading.

Shares of Customs Sensitive Apple Inc (NASDAQ 🙂 slipped 1.1%, while chip manufacturers, which derive a large chunk of revenue from China, also took a hit.

The sudden escalation in trade rhetoric comes days after the Federal Reserve downplayed expectations of further aggressive monetary policy actions after cutting interest rates for the first time in a decade.

Hoping that the Fed would be more accommodating to counteract the impact of the wartime trade war had helped Wall Street's most important indices to record highs last month.

The Labor Department's work report, due at 8:30 a.m. ET, is likely to show growth in the United States in July position after major gains last month, with wages maintained their moderate rate of increase.

At 06:39 ET, down 44 points, or 0.17%. The S&P 500 e-minis was down 8 points, or 0.27%, and down 41.5 points, or 0.53%.

Semiconductor stock Micron Technology (O :), Nvidia Corp (O :), Applied Materials Inc (O 🙂 and Intel Corp (O 🙂 fell between 1% and 3%.

The second quarter earnings season is in full swing, with 74.4% of the 355 S&P 500 companies reporting so far beating performance estimates, according to Refinitive data.

Analysts are now seeing revenue growth of the S&P 500 at 2.5%, up from 0.3% a month ago, according to Refinitive data.

NetApp Inc (O 🙂 fell 18.8% after the data storage equipment manufacturer lowered its forecast for the first quarter and 2020, due to a weakening macro environment in the latter half of the quarter.

Pinterest Inc (N 🙂 jumped 17.1% after online clipboard raised its full-year sales forecast and reported second-quarter sales over Wall Street estimates.