Futures tied to major U.S. equity averages traded in negative territory as U.S.-China tensions continued to heat up.
Dow Jones Industrial Average futures implied a drop of more than 175 points at the open. S&P 500 futures and the Nasdaq 100 futures also traded lower.
The overnight moves came after U.S. President Donald Trump on Thursday issued executive orders to address “the threat posed” by Chinese apps TikTok and WeChat. As part of the order, any transaction with ByteDance and Tencent, the parent companies of TikTok and WeChat, respectively, will be barred in 45 days.
It comes as tensions between Washington and Beijing continue to escalate over several issues including the origins of the coronavirus and democracy in Hong Kong.
Meanwhile, investors are watching closely for the upcoming monthly jobs report due at 8:30 a.m ET Friday.
It’s widely expected that the labor market’s rebound has slowed down amid a spike in coronavirus cases across the U.S. Economists predicted that the economy gained 1.48 million jobs in July, down sharply from the 4.8 million new payrolls in June, according to Dow Jones. The jobless rate is expected to dip to 10.6% in July from 11.1%.
“Tomorrow’s employment report should provide a little more clarity on whether or not businesses are starting to hire again or if there is continued trepidation due to Covid,” said Brian Price, head of investment management at Commonwealth Financial Network. “If the number surprises on the downside and the unemployment rate doesn’t dip below 11% then we could see a market pullback on the news.”
The jobs data will come as lawmakers and the White House struggle to agree on a new stimulus package after a $600 per week enhanced federal unemployment benefit expired at the end of July.
The Trump administration has threatened to pull out of talks and try to address jobless benefits and the eviction moratorium by executive action if the sides fail to reach an agreement by Friday.
The stock market is coming off five consecutive days of gains as the technology sector built on its momentum. This week’s gains in the S&P 500 pushed the equity benchmark just 1.3% below its Feb. 19 record. The Nasdaq Composite also closed above 11,000 for the first time ever on Thursday.
“These big round numbers are a nice reminder of just how strong this rally has been since the March lows,” said Ryan Detrick, chief investment strategist for LPL Financial. “When you look at how strong earnings and guidance have been from the group, you realize there’s a reason the Nasdaq is at 11,000 and why eventual continued strength is quite likely.”
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