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Stocks - U.S. Futures Lurch Lower as Trade War Escalation Looms

Investing.com -- U.S. stocks are under pressure again Thursday, after China vowed to retaliate if the U.S. proceeds with its intention to raise tariffs on $200 billion worth of Chinese goods from the end of the week.

China’s Commerce Ministry said overnight it would take 'necessary retaliatory measures' if U.S. tariffs are raised – a step that now seems near-certain since the publication of the measures in the Federal Register on Wednesday.

Dow futures were down 168 points or 0.6% by 6:45 AM ET (1045 GMT), while S&P 500 futures lost 19 points or 0.7% and the tech-heavy Nasdaq 100 futures contract was down 61 points or 0.8%.

The escalating trade conflict has sent shudders through global markets all week, with traders now revising earlier optimistic assumptions that President Donald Trump’s messages over Twitter at the weekend were more PR than substance.

“With Trump's unpredictable, petulant and often bizarre reaction function, nothing can be ruled out,” said ADM ISI strategist Marc Ostwald in a note to clients.

Ostwald pointed out that China’s announcement that it would extend "preferential taxes for integrated circuit and software companies" made it harder to reach a deal this week, given that ending subsidies has been one of the U.S.’s key demands. U.S. chipmakers Intel (NASDAQ:INTC) and Micron (NASDAQ:MU), which would suffer from such subsidies to local rivals, were both down in premarket trade.

Elsewhere, Walt Disney (NYSE:DIS) was indicated down 0.5%, slightly ahead of the broader market, after posting strong first-quarter results after the bell on Wednesday. The numbers beat expectations slightly.

Meanwhile smart TV maker Roku (NASDAQ:ROKU) was indicated up 9.4% after its first-quarter revenue and profit raced past expectations, reflecting the increasing pace of streaming adoption by consumers.

Oil prices were inching up again on geopolitical tensions, with Iran pledging to resume uranium enrichment and North Korea test-firing more unidentified “projectiles” according to newswire reports.

U.S. crude oil futures were back at $62.13 a barrel, up nearly a dollar from Wednesday’s lows. Brent oil was traded up 0.1% at $70.44 a barrel.

Elsewhere in commodities, gold futures rose 0.2% to $1,283.95 a troy ounce on increased demand for safe havens. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was profiting from the same trend, rising 0.1% to 97.440, near a one-week high.

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