U.S. stock markets are set to reopen lower after the long Labor Day weekend. The new U.S. and Chinese import tariffs came into effect during this period. Complicating things further, China filed a formal complaint over the U.S. tariffs at the World Trade Organization.
According to reports, the two economic powers had failed to agree on a date to negotiate over the weekend.
The official Chinese Yuan exchange rate continues to weaken. The Dollar index, which tracks the Greenback against a basket of developed market currencies, had hit its highest since April 2017 – a development that threatens to squeeze the international earnings of U.S. companies.
At 6 AM ET, the S&P 500 Futures contract and Dow Jones 30 Futures were indicated to have reached a low of 1.0% while the Nasdaq 100 Futures contract was at 1.2%
The general risk-off mood is still clear in the bond market, where the 30-year Treasury bond continues to yield under 2%; the benchmark 10-year note yield is still trading below the two-year mark. Fed hawk Eric Rosengren, whose opposition to further interest rate cuts is already on the record and is unlikely to change much.
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