U.S. Stocks May Move Back To The Downside As Trade Tensions Resurface

(RTTNews) - Stocks are likely to come under pressure in early trading on Tuesday, moving back to the downside following the substantial rebound in the previous session. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1 percent.

Renewed concerns about trade tensions between the U.S. and China are likely to weigh on Wall Street after President Donald Trump's more conciliatory post about China helped trigger the rally on Monday.

Asked about the dispute over China's expansion of export controls on rare earths, a spokesperson for China's Ministry of Commerce suggested the country was only responding to Washington's restrictions on Chinese firms.

"The US has long overstated national security, abused export controls, and adopted discriminatory practices against China," the spokesperson said, according to Google translate.

They added, "In particular, since the Madrid trade talks between China and the U.S., the U.S. has continued to impose a series of new restrictive measures on China, which have seriously harmed China's interests and seriously undermined the atmosphere of the bilateral trade talks."

The spokesperson reiterated that China is willing to "fight to the end" if there is a trade war but said the "door is open" to trade talks.

Beijing has also announced sanctions against five U.S.-based subsidiaries of South Korean shipping giant Hanwha Ocean, accusing the firm of cooperating with Washington in its curbs on China's maritime sector.

After moving sharply higher early in the session, stocks continue to turn in a strong performance throughout the trading day on Monday. The major averages all showed strong moves to the upside, partly offsetting the steep losses posted last Friday.

The major averages moved roughly sideways after the early surge, hovering near their best levels of the day. The Nasdaq spiked 490.18 points or 2.2 percent to 22,694.61, the S&P 500 shot up 102.21 points or 1.6 percent to 6,654.72 and the Dow jumped 587.98 points or 1.3 percent to 46,067.58.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index plunged by 2.6 percent, while Hong Kong's Hang Seng Index tumbled by 1.7 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is down by 1.3 percent, the French CAC 40 Index is down by 1.0 percent and the U.K.'s FTSE 100 Index is down by 0.4 percent.

In commodities trading, crude oil futures are tumbling $1.42 to $58.07 a barrel after climbing $0.59 to $59.49 a barrel on Monday. Meanwhile, after soaring $132.60 to $4,133 an ounce in the previous session, gold futures are edging down $3.60 to $4,129.40 an ounce.

On the currency front, the U.S. dollar is trading at 151.98 yen compared to the 152.27 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1553 compared to yesterday's $1.1568.