U.S. stock benchmarks poised to slump as trade angst rattles global markets

U.S. stock-index futures traded firmly lower on Thursday as Wall Street investors appeared to focus on signs of heightened tensions between the U.S. and China for a second straight session, despite a batch of corporate results that have largely come in ahead of expectations.

What are the benchmarks doing?

Futures for the Dow Jones Industrial Average YMU8, -0.64% were down 155 points, or 0.6%, at 25,134, while those for the S&P 500 index ESU8, -0.57% slipped by 16 points, or 0.6%, to 2,795. Nasdaq-100 futures NQU8, -0.79% slumped 55 points, or 0.8%, to 7,223.

On Wednesday, the Dow DJIA, -0.32% slid 81.37 points, or 0.3%, to 25,333.82. The S&P 500 SPX, -0.10% shed 2.93 points, or 0.1%, to 2,813.36, while the Nasdaq Composite Index COMP, +0.46% gained 35.50 points, or 0.5%, to 7,707.29.

A loss for the technology-laden index would snap a two-session rebound, which followed a sizable decline led by large-capitalization, internet-and-technology-related names on Monday.

What��s driving markets?

Worries about apparent tensions between Washington and Beijing washed onto Asian shores, buffeting major benchmarks in Asian hours and dampening the buying mood in the U.S.

On Wednesday, President Donald Trump��s administration threatened to more than double proposed tariffs on $200 billion of Chinese goods to 25%, up from an original 10%. The Trump administration didn��t provide specific reasons for such an increase, but the potential for an intensification has helped to unsettle markets during what is typically considered an unfavorable month for stock-market gains.

One of China��s premiere equity benchmarks, the Shanghai Composite Index SHCOMP, -2.00% fell 2% on the day and has dropped 21% since a recent peak in January.

Thursday��s trading action come a day after the Federal Reserve left its monetary policy unchanged, as expected, and affirmed its upbeat outlook for the domestic economy. That supported expectations that the central bank will raise benchmark interest rates twice more before the end of year, starting as early as next month.

The 10-year Treasury rate rose to a psychologically important level of 3% in Wednesday��s session, amid the Fed��s updated policy statement. That added to pressure on prices of government bonds, pushing yields higher on anticipation of further tightening by the Fed. Higher interest rates can mean higher borrowing costs for U.S. corporations and raise questions about their valuations in such an environment. The 10-year Treasury note TMUBMUSD10Y, -0.78% �recently yielded 2.98%.

Investors also digested the latest moves from the Bank of England, which raised its main interest rate by 25 basis points to 0.75%, as had been expected. The move underscored how a number of central banks are beginning to normalize their policies in the aftermath of the 2007-09 financial crisis, a trend that could weaken a tailwind that has boosted stocks for years.

What else is on investors�� radar?

A reading of weekly jobless claims ended July 28 is due at 8:30 a.m. Eastern Time, with 220,000 claims expected, while a report on factory orders for June is slated for 10 a.m., with a gain of 0.7% forecast by economists polled by MarketWatch.

The economic readings come ahead of highly anticipated jobs report for July.

What are market participants saying

��The tough talk from President Trump has prompted traders to be fearful about global growth,�� said David Madden market analyst at CMC Markets UK in a Thursday research note.

What stocks are in focus

Investors continued to digest results from the second-quarter earnings season, which have mostly supported markets. According to data from JPMorgan, with more than 60% of the market having reported, 86% of companies in the S&P 500 have topped profit expectations, the highest such ratio in its data, which goes back to 2009. Nearly 75% of companies have beaten revenue expectations.

Tesla Inc. TSLA, +0.91% �jumped 9% in premarket trading a day after the electric-car maker reported quarter revenue that was stronger than expected. The company, shares of which have been extremely volatile throughout 2018, also said it expects to be profitable and cash-flow positive in the second half of the year.

Aetna Inc. AET, -0.85% �reported second-quarter earnings and revenue that were well above expectations.

Yum Brands Inc. YUM, +0.23% �posted adjusted second-quarter earnings that beat expectations, and while revenue fell from the prior year, it was also ahead of forecasts.

Teva Pharmaceutical Industries Ltd. TEVA, -0.29% �tumbled 5% in premarket trading. The company reported second-quarter earnings that beat expectations and revenue that was in line with analyst forecasts.

Blue Apron Holdings Inc. APRN, +2.11% �reported a second-quarter loss that narrowed from the previous year, even as revenue fell 25%. The stock rose 2.1% in premarket trading, though it remains down 40% for 2018.

Red Robin Gourmet Burgers RRGB, -3.07% tumbled 25% in premarket trading a day after it gave a disappointing outlook.

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Comment Related Topics U.S. Stocks Markets NY Stock Exchange NASDAQ Quote References YMU8 -162.00 -0.64% ESU8 -16.00 -0.57% NQU8 -57.75 -0.79% DJIA -81.37 -0.32% SPX -2.93 -0.10% COMP +35.50 +0.46% SHCOMP -56.51 -2.00% TMUBMUSD10Y -0.02 -0.78% TSLA +2.70 +0.91% AET -1.60 -0.85% YUM +0.18 +0.23% TEVA -0.07 -0.29% APRN +0.05 +2.11% RRGB -1.45 -3.07% Show all references MarketWatch Partner Center Most Popular Amazon��s Jeff Bezos would need to spend $28 million a day to avoid getting richer Warren Buffett likely just made more than $2.6 billion, thanks to soaring Apple shares Asian stock markets drop, weighed by pullback in China Elon Musk seems to have learned a few lessons, but the big one remains Funds For Making Money Even in Down Markets Community Guidelines �� FAQs BACK TO TOP MarketWatch Site Index Topics Help Feedback Newsroom Roster Media Archive Premium Products Mobile Company Company Info Code of Conduct Corrections Advertising Media Kit Advertise Locally Reprints & Licensing Your Ad Choices   Dow Jones Network WSJ.com Barron's Online BigCharts Virtual Stock Exchange Financial News London WSJ.com Small Business realtor.com Mansion Global

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