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US stock futures pulled back on Wednesday as investors weighed a flare-up in US-China tensions over chips and braced for a batch of retail earnings for insight into the economic impact of President Trump's tariffs.
Dow Jones Industrial Average futures (YM=F) fell 0.9%, while S&P 500 (ES=F) futures dropped 0.8%. Contracts tied to the tech-heavy Nasdaq 100 (NQ=F) also slid 0.9%.
Stocks are retreating, with the S&P 500 snapping a six-day run of gains as relief over the surprise US-China trade truce fades. Meanwhile, growing concern about the US deficit and looming debt bomb has intensified attention on discussions around Trump's tax-and-spending bill.
The US and China have begun feuding over chips again, less than two weeks after agreeing a temporary pause in tariff hostilities. The Trump administration's warnings against using AI chips by Huawei have undermined the recent trade talks in Geneva, China said — putting the fragile trade deal at risk and reviving worries about economic fallout.
Nvidia CEO Jensen Huang said Wednesday the US curbs on exports of AI chips were "a failure" that had boosted Chinese alternatives and cost American companies billions of dollars in lost sales.
Read more: The latest on Trump's tariffs
Tariffs are in focus for Target's (TGT) quarterly results due later, after Trump told retailers they need to "eat" the costs of duties and not pass them on to customers. The president pushed back after Walmart (WMT) last week warned it would need to hike prices. Other retailers on Wednesday's docket include Lowe's (LOW), TJX Companies (TJX), and Urban Outfitters (URBN).
Meanwhile, markets are keeping a close eye on Trump's giant tax bill, as a reportedly frustrated president urges Republican lawmakers to put their demands on the back burner so it can progress. Anxieties about the budget bill and the ballooning US debt have helped push up US bond yields. The 30-year Treasury yield (^TYX) jumped back above the key 5% level on Wednesday.
Currency concerns also have alarm bells ringing as the US dollar fell to a two-week low with traders eyeing the ongoing G-7 meeting for signs the Trump administration may favor a weaker currency, while concerns over the growing US budget deficit and potential tax cuts also weigh on sentiment.
LIVE 5 updates
Wolfspeed stock plummets on report it's set for bankruptcy
Shares of Wolfspeed (WOLF) plunged over 60% on Wednesday on the heels of a report that the semiconductor supplier is getting ready to file for bankruptcy within weeks.
The company is pursuing a Chapter 11 plan as it struggles to tackle its debt pile, per The Wall Street Journal report.
Reuters reports:
Bloomberg terminal outage hits traders
Traders faced a widespread outage to Bloomberg's terminal early on Wednesday morning that hampered a UK auction of government debt, per several media reports.
The disruption and delays to the markets data service took hold at around 4:30 a.m. ET and weren't fixed until about 6 a.m.
The Financial Times reported:
Read more here (premium).
Good morning. Here's what's happening today.
Dollar continues to fall as US debt problems come into focus
The dollar (DX=F) sank to a two-week low overnight Tuesday as the US's mounting debt concerns continue to impact the greenback. A Group-of-7 meeting currently underway in Banff, Canada, has brought the administration's approach towards buoying the dollar to the minds of investors.
Bloomberg reports:
Oil jumps as CNN reports Israel has plans to attack Iran
CNN has reported that Israel is in its final stages of preparing an attack on Iran, leading to oil prices jumping.
Bloomberg reports:
