U.S. Stock Futures Slip as Concerns About Trade Talks Mount

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10/10/2019 | 09:01 am

By Avantika Chilkoti

U.S. stock futures edged down as speculation about a variety of potential outcomes for trade talks between the world's two largest economies battered global markets.

Futures tied to the Dow Jones Industrial Average gauge slipped 0.3% as investors grew concerned that the U.S.-China trade negotiations, set to resume later in the day, may fail to break a five-month stalemate with both sides dialing back expectations in public comments. Investors have been trying to assess the likelihood of a partial trade deal, concessions by Beijing and a potential delay in additional tariffs by the Trump administration.

"Throughout the course of the week we have had conflicting signals from both sides of the negotiating table," said Matthew Cairns, a senior rates strategist at Rabobank. He pointed to Beijing's move to narrow the scope of the negotiations this past weekend and the U.S. expansion of its export blacklist on Monday, which raised the issue of Beijing's repression of Muslim minorities. "That is a lot of to-ing and fro-ing from both sides of the negotiating table, which clearly provides little material traction for markets to grab onto."

The Stoxx Europe 600 gauge wavered between gains and losses. In Asia, the Shanghai Composite Index gained 0.8% while Japan's Nikkei 225 rose 0.5%.

Philips Electronics was among the biggest losers in Europe. The stock declined by about 8% in Amsterdam after the Dutch company issued a profit warning.

Meanwhile, luxury stock LVMH Mot Hennessy Louis Vuitton gained 4.2% following better-than-expected revenue growth, even as the Hong Kong protests weighed on Asian sales. Christian Dior, which was acquired by LVMH in 2017, rose 3.3%.

Later in the day, investors will also be watching closely as the U.S. Labor Department publishes its consumer-price index, which measures changes in how much Americans are paying for items such as clothes, gas and food. Economists surveyed by The Wall Street Journal expect the index rose 0.1% over a month in September rose and 1.8% over the prior year.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

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