U.S. stock index futures pointed to more losses on Monday as China’s yuan hit its lowest in a decade, spurring a continuation of a sell-off on trade concerns on Friday that generated the S&P 500’s worst weekly performance of 2019.
China let the yuan breach the key 7-per-dollar level for the first time since 2008 on Monday, a sign Beijing might be willing to tolerate more currency weakness that could further inflame the trade conflict with the United States.
All three of Wall Street’s main indexes fell sharply at the end of last week after President Donald Trump upended a temporary trade truce by promising another round of tariffs on Chinese imports.
The support that markets have seen since May from expectations of an aggressive round of monetary easing has also evaporated in the aftermath of the U.S. Federal Reserve’s statement last week.
The S&P 500 and Dow e-minis EScv1 1YMcv1 fell by around 1.4%, while futures on the Nasdaq NQcv1, heavily exposed by its chipmakers and other global technology players to Chinese markets, were down 1.7%.
Shares of Apple Inc slid 2.5% in premarket trading as analysts expected the newly proposed tariffs to hurt demand for its flagship iPhone, while chipmakers Advanced Micro Devices Inc, Nvidia Corp Micron Technology Inc and Intel Corp dropped between 1.4% and 3.4%.
Industrial bellwethers Boeing Co and Caterpillar Inc fell between 2% and 1.3%, respectively.
Signals from the bond market were also daunting as investors’ searching for safer assets sent the U.S. 10-year Treasury yields to fresh three-year lows following their biggest weekly drop in seven years on Friday. [US/]
The rest of the high-flying FAANG group also lost ground, with Facebook Inc Amazon.com Inc, Netflix Inc and Google-parent Alphabet Inc down between 1.7% and 2.3%.
In economic news, data due at 10:00 a.m. ET is expected to show the Institute for Supply Management’s (ISM) non-manufacturing index rose to 55.5 in July from 55.1 a month earlier.