Wall Street set for losses as U.S.-Russia tensions weigh
New York (Reuters): Wall Street was set to open lower on Wednesday due to heightened concerns over a row between the United States and Russia over military action in Syria.
The face-off intensified after Russia warned that any U.S. missiles fired at Syria over a suspected chemical weapons attack on a rebel enclave would be shot down.
As a reply, U.S. President Donald Trump declared that missiles “will be coming” and blasted Moscow for standing by Syrian President Bashar Assad.
At 8:34 a.m. ET, Dow e-minis (1YMc1) were down 230 points, or 0.94 percent. S&P 500 e-minis (ESc1) fell 23 points, or 0.87 percent and Nasdaq 100 e-minis (NQc1) declined 58 points, or 0.88 percent.
“There is going to be broad-based weakness, although one sector that is likely to outperform will be anything tied to the energy space,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Escalating tension in Syria lifted oil prices to its highest in more than three years. [O/R]
On Tuesday, the main Wall StreetU.S. indexes closed up nearly 2 percent after Chinese President Xi Jinping promised to lower import tariffs in an attempt to defuse trade dispute with the United States.
“With Xi’s comments yesterday calming some of the trade war concerns, some of that optimism is going away with the concerns over what the final outcome might be over U.S. involvement over Syria,” James said.
U.S. consumer prices fell for the first time in 10 months in March, weighed down by a decline in the cost of gasoline, but underlying inflation continued to firm amid rising prices for healthcare and rental accommodation.
The Labor Department said its Consumer Price Index slipped 0.1 percent, the first and largest drop since May 2017. But the core CPI, which excludes the volatile food and energy components, rose 2.1 percent year-on-year in March, the largest advance since February 2017.
Later in the day, the Federal Reserve is set to release the minutes of its March meeting, at which it voted to raise interest rates.
The minutes will show the view within the Fed on the possible impact of the Trump administration’s trade policies.
Among stocks, Hilton Worldwide (HLT.N) jumped 3 percent after the hotel operator’s main shareholder HNA Tourism Group decided to sell its stake in the company.
Facebook Inc (FB.O) shares were down 0.8 percent in premarket trading.
Shares closed up 4.5 percent in Wall Street on Tuesday after Chief Executive Mark Zuckerberg, in the first of two U.S. congressional hearings, made no further promise to support new legislation or change how the social network does business.