(Reuters) – Wall Street was set to open sharply lower on Wednesday, as poor economic data from China and Germany put the focus back on the impact of a bruising Sino-U.S. trade war which is pushing some major economies toward the brink of recession.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 13, 2019. REUTERS/Eduardo Munoz
The outlook for Germany’s export reliant economy was also grim and Chinese industrial output growth cooled to a more than 17-year low, adding to headwinds for U.S. multinationals that rely on global demand.
The U.S. bond market showed red flags, with two-year Treasury yields rising above those for 10-year paper for the first time since 2007, pointing to the risk of recession.
Wall Street’s main indexes surged more than 1.5% on Tuesday after Washington delayed the introduction of tariffs on some Chinese consumer goods.
“It’s almost as if global investors either don’t buy the tariff delay as a sign of real progress in the U.S.-China trade war or have been too consumed by further evidence of global economic weakness to care,” BMO Capital Markets strategist Stephen Gallo said.
At 8:28 a.m. ET, Dow e-minis 1YMcv1 were down 361 points, or 1.37%. S&P 500 e-minis EScv1 were down 39.25 points, or 1.34% and Nasdaq 100 e-minis NQcv1 were down 119 points, or 1.54%.
Banks were among the losers in trading before the bell, with Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N), Goldman Sachs (GS.N), Wells Fargo & Co (WFC.N) and Morgan Stanley (MS.N) down between 2.3% and 3.1%.
Shares of Apple Inc (AAPL.O) were down 2.3% after boosting markets a day earlier with a 4% rise.
Macy’s Inc (M.N) tumbled 12.9% after the department store operator cut its full-year profit forecast as it discounted heavily to clear excess spring season inventory.
Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva