Investing.com - U.S. stock futures pointed to a sharply lower open on Tuesday as concerns over the latest escalation in the U.S.-China trade war drove investors into safe haven assets.
The declines came as U.S. markets prepared to reopen after the long Labor Day weekend.
The U.S. on Sunday began imposing 15% tariffs on a variety of Chinese goods. Meanwhile, China began imposing new duties on U.S. imports including crude oil, and on Monday filed a formal complaint over the U.S. tariffs at the World Trade Organization.
Although U.S. President Donald Trump has said both sides would still meet for talks later this month, there was no agreement over the weekend on the timing.
Investors were looking ahead to the ISM manufacturing survey, due at 10 AM ET (1400 GMT).
Last month’s index reading of 51.2 was the lowest since Trump was elected in 2016. Analysts expect it to inch down to 51.1, still just above the 50 level that separates growth from contraction.
"The ISM ... is going to be (a) particular important market mover as those who have been buying bonds strongly, suggesting that the U.S. is on course for recession, need to see some sort of justification," said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.
IHS Markit’s PMI for U.S. manufacturing, which already last month suggested the sector was in recession is also due.
Outside of equities, the U.S. dollar index, which measures the greenback against six developed-market currencies, was up 0.4% to 99.22, while the yield on the 10-year Treasury was last trading at 1.48%, still below the yield on the two-year note.
The British pound was the big mover in foreign exchange markets, falling below 1.20 to its lowest level in three years after lawmakers started a move to force Prime Minister Boris Johnson to abandon his plans that could lead to a no-deal Brexit on Oct. 31.
--Reuters contributed to this report
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