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US STOCKS-Futures decline ahead of inflation reading


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* Futures off: Dow 0.24%, S&P 0.23%, Nasdaq 0.42%

By Shreyashi Sanyal

President Donald Trump said he was holding up a trade dealwith China and had no interest in moving ahead unless Beijingagrees to four or five major points, which led the blue-chip Dowindex .DJI to snap a six-day winning streak on Tuesday. urn:newsml:reuters.com:*:nL2N23I153

With under three weeks to go before proposed talks betweenthe United States and Chinese leaders, sources say there hasbeen little preparation for a meeting even as the health of theworld economy is at stake. urn:newsml:reuters.com:*:nL2N23D13K

Trump also said that interest rates were "way too high",ahead of a reading on U.S. inflation that could shift the oddstowards a cut in rates as soon as July. urn:newsml:reuters.com:*:nW1N1ZU02F

Hopes that the Federal Reserve will act to counter a slowingglobal economy due to escalating trade war have spurred a rallyin stocks this month, with the S&P 500 index .SPX up about 5%so far in June.

Fed policymakers will meet on June 18-19 and markets havepriced in at least two rate cuts by the end of 2019. Fed fundfutures FEDWATCH imply around an 80% chance of an easing assoon as July.

That might change depending on what U.S. consumer price datashow at 8:30 a.m. ET. Headline inflation is expected to slow to1.9%, with the core rate, excluding volatile items such as foodand energy, steady at 2.1% on a year-on-year basis for May.

Investors will closely watch the data for further evidenceof inflation after U.S. producer prices increased solidly for asecond straight month in May, in line with expectations ofeconomists polled by Reuters. urn:newsml:reuters.com:*:nL2N23H1AP

Meanwhile, concerns of a slowdown in China rose as datashowed factory inflation slowed in May and the country reportedthe worst-ever monthly sales drop. urn:newsml:reuters.com:*:nL4N23H1U6urn:newsml:reuters.com:*:nL4N23J1NN

At 7:17 a.m. ET, Dow e-minis 1YMc1 were down 63 points, or0.24%. S&P 500 e-minis ESc1 were down 6.5 points, or 0.23% andNasdaq 100 e-minis NQc1 were down 31.25 points, or 0.42%.

Trade-sensitive Caterpillar IncCAT.N dipped 0.1%, whileBoeing Co BA.N dropped 0.7% in premarket trading.

Chipmakers and semiconductor equipment makers, which get asizeable portion of revenue from China, declined, with MicronTechnology IncMU.O , Nvidia CorpNVDA.O and AppliedMaterials IncAMAT.O trading down between 1.6% and 3%.

Qualcomm IncQCOM.O slipped 4% after smartphone maker LGElectronics Inc066570.KS and U.S. Federal Trade Commissionopposed the chip supplier's efforts to put a sweeping U.S.antitrust decision on hold. urn:newsml:reuters.com:*:nL2N23J00D

Medidata SolutionsMDSO.O fell 4.3% after France'sDassault Systemes DAST.PA agreed to buy the U.S. firm focusedon clinical trials for $92.25 per share, a discount of 3% to itslast close. urn:newsml:reuters.com:*:nL8N23J0JT (Reporting by Shreyashi Sanyal and Amy Caren Daniel inBengaluru; Editing by Arun Koyyur) ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ;Reuters Messaging:Shreyashi.Sanyal.thomsonreuters.com@reuters.net))






This article appears in: Politics , World Markets , US Markets , Stocks



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