U.S. stock index futures were sharply lower Tuesday morning, after the world’s two largest economies began imposing new tariffs on one another’s goods.
Around 6:10 a.m. ET, Dow futures indicated a negative open of more than 225 points. Futures on the S&P and Nasdaq were both lower. The declines came after investors observed a market holiday on Monday.
The U.S. imposed 15% tariffs on a variety of Chinese goods on Sunday, while China imposed new charges on U.S. products from September 1. It marked the latest escalation in their long-running trade war.
The U.S. and China have imposed tariffs on billions of dollars worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
President Donald Trump has said officials from both sides were still planning to meet later this month, despite rising tensions.
On Monday, Beijing filed a complaint against Washington at the World Trade Organization over U.S. import duties. China claimed the latest round of tariffs violated a consensus reached by leaders of both countries in Osaka, Japan.
Brexit uncertainty
Aside from trade, market participants continued to monitor the fallout of Britain’s constitutional crisis over Brexit.
U.K. lawmakers return from a summer recess on Tuesday, with a cross-party group of MPs (members of parliament) expected to apply for an emergency debate and seize control of the agenda of the House of Commons.
The move is an attempt to stop a so-called “no-deal” Brexit on October 31, which is seen by many inside and outside of parliament as a “cliff-edge” scenario to be avoided at all costs.
Prime Minister Boris Johnson could call for a snap general election if opposition lawmakers vote against a no-deal Brexit this week.
Sterling fell below $1.20 on Tuesday morning, reaching levels not seen since October 2016.
Data, earnings
On the data front, manufacturing Purchasing Managers’ Index (PMI) figures for August will be released at around 9:45 a.m. ET. The Institute for Supply Management’s (ISM) manufacturing index for August and construction spending data for July will be released slightly later in the session.
In corporate news, Coupa Software and Cango are both scheduled to report their latest quarterly earnings after market close.
