Aug 14 (Reuters) – Wall Street was set to open sharply lower on Wednesday, as poor economic data from China and Germany put the focus back on the impact of a bruising Sino-U.S. trade war which is pushing some major economies towards the brink of recession.
The outlook for Germany’s export reliant economy was also grim and Chinese industrial output growth cooled to a more than17-year low, adding to headwinds for U.S. multinationals that rely on global demand.
The U.S. bond market showed red flags, with two-yearTreasury yields rising above those for 10-year paper for the first time since 2007, pointing to the risk of recession.
Wall Street’s main indexes surged more than 1.5% on Tuesday after Washington delayed the introduction of tariffs on someChinese consumer goods.
“It’s almost as if global investors either don’t buy the tariff delay as a sign of real progress in the U.S.-China trade war or have been too consumed by further evidence of globale conomic weakness to care,” BMO Capital Markets strategistStephen Gallo said.
At 8:28 a.m. ET, Dow e-minis were down 361 points, or 1.37%. S&P 500 e-minis were down 39.25 points, or1.34% and Nasdaq 100 e-minis were down 119 points, or1.54%.
Banks were among the losers in trading before the bell, withBank of America Corp, Citigroup Inc, JPMorganChase & Co, Goldman Sachs, Wells Fargo & Coand Morgan Stanley down between 2.3% and 3.1%.
Shares of Apple Inc were down 2.3% after boosting markets a day earlier with a 4% rise.
Chipmakers were also trading lower, with Micron TechnologyInc, Broadcom Inc and Nvidia Corp down more than 2%.
Macy’s Inc tumbled 12.9% after the department store operator cut its full-year profit forecast as it discounted heavily to clear excess spring season inventory.
Rivals Target Corp and Nordstrom Inc slipped between 3.8% and 4.5%.
(Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva)
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