Trade Tensions Weigh on Markets



U.S. stock index futures fell on Tuesday after a report from the South China Morning Post said China and the U.S. are unlikely to reach a trade deal this week.

Futures for the Dow Jones Industrials dropped 106 points, or 0.4%, Tuesday to 27,796.

Futures for the S&P 500 fell 9.25 points, or 0.3%, at 3,125.25.

The NASDAQ Composite sank 31.5 points, or 0.4%, to 8,324.50.

The Morning Post report said chances of a deal on that front are falling as the U.S. focuses on finalizing a trade deal with Mexico and Canada. Sources told media outlets on Monday that House Democrats and the Trump administration are close to a tentative deal that would replace North American Free Trade Agreement.

However, the Morning Post report added that additional tariffs on Chinese goods are not expected to take effect. The U.S. had set Dec. 15 as a deadline for both sides to reach a so-called phase one trade deal. If a deal was not reached by then, the U.S. would implement more tariffs targeting China.

Trade bellwether Apple was down 0.8%, and Boeing was down 0.5%.

Investors will also closely monitor the Federal Reserve as the central bank kicks off its last two-day monetary policy meeting of the year. The Fed is expected to hold rates steady.

Overseas, in Japan, the Nikkei 225 fell 0.1% Tuesday, while in Hong Kong, the Hang Seng Index backtracked 0.2%.

Oil prices dipped 36 cents at $58.66 U.S. a barrel.

Gold prices hiked $6.60 to $1,471.50 U.S. an ounce.