WASHINGTON (dpa-AFX) - Following the rally seen last Friday, stocks are likely to show a substantial move back to the downside in early trading on Monday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 453 points.
Renewed concerns about trade talks between the U.S. and China are likely to weigh on the markets after President Donald Trump threatened to raise tariffs on billions of dollars worth of Chinese goods.
Claiming negotiations are moving 'too slowly,' Trump said tariffs on $200 billion worth of Chinese goods would be increased to 25 percent on Friday and threatened to impose tariffs on another $325 billion worth of Chinese goods 'shortly.'
'For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,' Trump tweeted. 'These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%.'
He added, 'The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!'
In response to the threats from Trump, a report from the Wall Street Journal said China is considering pulling out of another round of trade talks scheduled to begin this week.
Trump's tweets come as concerns about a U.S.-China trade war have recently been on the back burner amid signs of progress in the prolonged trade talks.
After moving moderately higher early in the session, stocks saw further upside over the course of the trading day on Friday. The tech-heavy Nasdaq showed a particularly strong upward move, reaching a new record closing high.
The major averages all finished the day firmly in positive territory. The Dow advanced 197.16 points or 0.8 percent to 26,504.95, the Nasdaq surged up 127.22 points or 1.6 percent to 8,164.00 and the S&P 500 jumped 28.12 points or 1 percent to 2,945.64.
Despite the rally on the day, the major averages turned in a mixed performance for the week. The Dow edged down by 0.1 percent, while the Nasdaq and the S&P 500 both edged up by 0.2 percent.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday, with markets in Japan still closed for holidays. China's Shanghai Composite Index plummeted by 5.6 percent, while Hong Kong's Hang Seng Index tumbled by 2.9 percent.
European stocks have also shown significant moves to the downside on the day, although the U.K. markets are closed. The French CAC 40 Index and the German DAX Index are plunging by 1.9 percent and 1.8 percent, respectively.
In commodities trading, crude oil futures are falling $0.46 to $61.48 a barrel after inching up $0.13 to $61.94 a barrel last Friday. Meanwhile, after climbing $9.30 to $1,281.30 an ounce in the previous session, gold futures are slipping $1.10 to $1,280.20 an ounce.
On the currency front, the U.S. dollar is trading at 110.90 yen compared to the 111.10 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1186 compared to last Friday's $1.1198.
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