US stock index futures fell on the first trading day of the new quarter as China’s decision to raise import tariffs on US products rekindled global trade war fears and technology stocks showed little signs of recovery.
Nasdaq futures pointed to a 0.6 per cent decline yesterday as big names including Facebook and Amazon fell in pre-market trading.
China, late on Sunday, said it would increase tariffs by up to 25 per cent on 128 US products, from frozen pork and wine to certain fruits and nuts, escalating a spat between the world’s biggest economies.
The move came in response to US duties on imports of aluminium and steel.
US President Donald Trump is separately preparing to impose tariffs of more than $50 billion targeting “largely high-technology” Chinese products.
Amazon fell 1.5 per cent after Mr Trump launched his second attack over the weekend, accusing the world’s biggest online retailer of getting unfairly cheap rates from the US Postal Service and not paying enough tax.
Facebook was down marginally as the data scandal last month continued to weigh.
Yesterday, brokerage Pivotal Research slashed its price target to $138 from $152.
After stellar gains in 2017 and early this year, the S&P technology index posted its worst performance in March in nearly two years.
Hit by concerns about a possible trade war, rising interest rates and valuations in the technology sector, the S&P 500 and the Dow Jones Industrial Average posted their worst declines in more than two years in the quarter ended March.
Meanwhile, oil fell to around $69 a barrel yesterday, reversing an earlier rally, as a rise in Russian production and concern about a US-China trade spat offset a drop in US drilling activity.
US drillers cut seven oil rigs in the week to March 29, bringing the total down to 797, the first decline in three weeks.
The rig count is closely watched as an indicator of future US oil output.
Brent crude, the international benchmark, fell 56 cents to $68.78 a barrel in afternoon trading, having rallied to $70.04 earlier. US crude slipped 75 cents to $64.19.
“Investors took their cue from falling United States drilling counts,” said Wang Xiao of Guotai Junan Futures.
“But increasing trade friction between China and the US is also likely to rock global markets and tarnish bullish sentiment in crude oil markets.”
Oil has risen from a multi-year low near $27 in January 2016, helped by production cuts led by the Organization of the Petroleum Exporting Countries and Russia, which started in 2017 and are due to run until the end of 2018.