(Reuters) – U.S. stock index futures were lower on the first trading day of the second half of this year, as worries of a trade war between the United States and other major economies did not let up.
Shanghai’s blue chip index .CSI300 fell 2.9 percent, days before the U.S. tariff on $34 billion worth of Chinese goods comes into effect, posing threats of a similar response from Beijing.
Trade war worries were also being compounded by a threat from the European Union to hit the United States with almost $300 billion in retaliatory tariffs.
On Friday, Canada struck back at the Trump administration over U.S. steel and aluminum tariffs, vowing to impose punitive measures on C$16.6 billion ($12.63 billion) worth of American goods.
It was the first day of the new month, quarter and half-year but there was no respite for bruised investors after the worst start to a year for world shares since 2010.
“The trading in the new quarter is getting off to an ugly start as hostile trade talks and retaliation by trading partners weigh on the markets. These effects are sending shock waves across the global markets,” Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.
Also weighing on the sentiment was lower crude prices, as Trump said Saudi Arabia has promised to raise oil production if needed. Brent crude LCOc1 fell 0.9 percent, after gaining more than 5 percent last week.
The Mexican peso whipsawed after Andres Manuel Lopez Obrador was elected president on Sunday, setting the stage for the most left-wing government in the country’s democratic history at a time of tense relations with the United States.
At 7:05 a.m. ET, Dow e-minis 1YMc1 were down 148 points, or 0.61 percent. S&P 500 e-minis ESc1 were down 14.5 points, or 0.53 percent and Nasdaq 100 e-minis NQc1 were down 48.25 points, or 0.68 percent.
Dell Technologies Inc (DVMT.N) jumped 14.7 percent after the world’s largest privately held technology company said it would buy out the holders of shares that track the performance of VMware Inc (VMW.N) using a mix of cash and equity in Dell. VMware shares had risen 14.3 percent in premarket trading.
Tesla (TSLA.O) shares were up 6.3 percent after the electric carmaker produced 5,000 Model 3 sedans in the last week of its second quarter, hours after deadline, two workers at the factory told Reuters.
Reporting by Amy Caren Daniel in Bengaluru