U.S. Index Futures Slide on Yuan Fix, Riling Up Trade Worries

(Bloomberg) -- U.S. stock-index futures fell as China’s central bank set its daily currency fixing at a slightly weaker level than expected, reviving trade tensions.

S&P 500 Index futures contracts expiring in September dropped as much as 0.5% as the yuan weakened. Futures on the Nasdaq 100 and Dow Jones Industrial Average both retreated as much as 0.5%.

The Chinese currency declined after the People’s Bank of China set the daily reference rate at 6.9996 per dollar. The fixing had been projected at 6.9977, according to the average estimate of 22 traders and analysts surveyed by Bloomberg.

“Trade was always going to be the wild card this year and it’s certainly shaping up that way. With the strength in equity returns this year and higher valuations on global equities, investors are more sensitive to it,” said Kerry Craig, global market strategist at JPMorgan Asset Management in Melbourne. “Unfortunately the uncertainty around trade is unlikely to abate in the near term.”

U.S. shares in New York recouped some of Monday’s declines as traders remained wary amid simmering trade friction. The S&P 500 Index jumped 1.3% on Tuesday after six days of losses.

To contact the reporter on this story: Jackie Edwards in Sydney at jedwards160@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Naoto Hosoda

©2019 Bloomberg L.P.