U.S. Index Futures Point to Losses at Open on China Tensions

(Bloomberg) -- U.S. stock-index futures declined, indicating losses at the open, on worries over escalating tensions with China.

Contracts on the S&P 500 and the Dow each dropped 0.7% as of 8:40 a.m. in London, while those on the Nasdaq 100 slid 1.3%. Tech shares may come under pressure after Intel Corp. warned of another production delay. The chip giant fell 11% in premarket trading.

A rally in U.S. stocks is losing steam this week, with an unexpected increase in jobless claims stoking worries about a stalling economy. Further sapping sentiment, China ordered the U.S. to close its consulate in the city of Chengdu, following through on its threat of retaliation after it was asked to shut down its facility in Houston.

The S&P 500 is poised for a second day of losses, threatening the gauge’s fourth straight week of gains.

“While investors welcomed recent progress made by health-care companies in the struggle against the pandemic, most of them are becoming increasingly worried that the relationship between Washington and Beijing will worsen prior to the U.S. election in November and put further pressure on riskier assets,” wrote Pierre Veyret, technical analyst at ActivTrades.

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