(Reuters) – U.S. stocks were set to open lower on Tuesday as weak economic data from China pointed to slowing growth in the world’s second largest economy, adding to fears of a global recession.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 9, 2019. REUTERS/Brendan McDermid
China’s producer price index fell 0.8% in August, the sharpest pace of decline in three years, as businesses slashed prices to cope with flagging demand amid a bruising trade war with the United States.
Shares of U.S. chipmakers, which generate a big chunk of revenue from China, came under pressure in premarket trading. Advanced Micro Devices Inc (AMD.O), Nvidia Corp (NVDA.O) and Applied Materials Inc (AMAT.O) fell between 0.6% and 1.1%.
Declines in technology and healthcare stocks kept Wall Street subdued in the previous session as investors held out for policy decisions from central banks on potential monetary easing.
While the U.S. Federal Reserve and the European Central Bank (ECB) are widely expected to cut interest rates over the next two weeks, investors doubt the extent to which central banks’ measures will stem an economic slowdown.
“Expectations may be in front of themselves about the amount of new monetary policy stimulus that the ECB is going to move forward with,” said Art Hogan, chief market strategist at National Securities in New York.
However, a prolonged U.S.-China trade war could dull the effect of potential rate cuts on economic growth, Hogan said.
Among other stocks, Ford Motor Co (F.N) fell 3.6% after ratings agency Moody’s downgraded its bonds to junk status overnight.
Separately, the U.S. House Judiciary Committee laid out plans to hold hearings into the Justice Department’s decision to open an antitrust investigation into Ford and three other automakers.
The so-called FAANG set of stocks were also lower, with Apple Inc (AAPL.O) dipping 0.1% ahead of an event where it is widely expected to unveil its latest iPhones. Details on its new video streaming service could also move shares of Netflix Inc (NFLX.O) and Walt Disney Co (DIS.N).
Later in the day, Boeing Co (BA.N) is set to report aircraft deliveries for the first eight months of 2019, which will give investors a deeper look into the effect of the grounding of 737 MAX jets.
At 8:40 a.m. ET, Dow e-minis 1YMcv1 were down 25 points, or 0.09%. S&P 500 e-minis EScv1 were down 5.25 points, or 0.18% and Nasdaq 100 e-minis NQcv1 were down 23 points, or 0.29%.
Reporting by Uday Sampath in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur