U.S. Stocks May Come Under Pressure As Trump Hikes Tariffs

(RTTNews) - Stocks staged a recovery attempt from an early sell-off in the previous session but are likely to move back to the downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 127 points.

Concerns about the economic impact of an escalating trade dispute between the U.S. and China may weigh on the markets after the U.S. raised tariffs on Chinese imports.

The U.S. hiked the tariff on $250 billion worth of Chinese goods from 10 percent to 25 percent after the U.S. and China failed to reach a trade deal by a midnight deadline.

President Donald Trump noted in a post on Twitter that the process has begun to place tariffs on the remaining $325 billion worth of Chinese imports.

Trump praised the massive tariff payments to the U.S. Treasury and said there is "absolutely no rush" to reach a trade agreement with China.

"Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do," Trump tweeted.

"Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch!" he added. "In the meantime, China should not renegotiate deals with the U.S. at the last minute. This is not the Obama Administration, or the Administration of Sleepy Joe, who let China get away with 'murder!'"

The developments on the trade front have largely overshadowed a typically closely watched report from the Labor Department showing consumer prices increased by slightly less than expected in April.

The Labor Department said its consumer price index rose by 0.3 percent in April after climbing by 0.4 percent in March. Economists had been expecting another 0.4 percent increase.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent for third consecutive month compared to economist estimates for a 0.2 percent uptick.

Compared to the same month a year ago, consumer prices in April were up by 2.0 percent, reflecting a modest acceleration from the 1.9 percent growth in March.

The annual rate of growth in core consumer prices also crept up to 2.1 percent in April from 2.0 percent in the previous month.

After falling sharply early in the session, stocks regained ground over the course of the trading day on Thursday but still closed mostly lower. Reaction to comments from President Donald Trump was the main driver of trading on the day.

The major averages finished the session in negative territory but well off their worst levels of the day. The Dow slid 138.97 points or 0.5 percent to 25,828.36, the Nasdaq fell 32.73 points or 0.4 percent to 7,910.59 and the S&P 500 slipped 8.70 points or 0.3 percent to 2,870.72.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although Japan's Nikkei 225 Index bucked the uptrend and dipped by 0.3 percent. China's Shanghai Composite Index spiked by 3.1 percent and Hong Kong's Hang Seng Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has climbed by 0.6 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent.

In commodities trading, crude oil futures are inching up $0.12 to $61.82 a barrel after falling $0.42 to $61.70 on Thursday. Meanwhile, after rising $3.80 to $1,285.20 an ounce in the previous session, gold futures are climbing $3.90 to $1,289.10 an ounce.

On the currency front, the U.S. dollar is trading at 109.67 yen versus the 109.74 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1246 compared to yesterday's $1.1215.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.