Futures hit by Sino-U.S. tensions at the end of strong month

Futures hit by Sino-U.S. tensions at the end of strong month

Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid

(Reuters) – U.S. stock futures dropped on Friday as investors braced for President Donald Trump’s response to China’s national security legislation for Hong Kong, threatening to take the shine off another month of strong gains for Wall Street.

Trump is due to make an announcement later in the day and has vowed a tough U.S. response to China’s move, which many fear could erode some of the U.S. economic privileges that Hong Kong enjoys.

U.S. stock indexes sold off late in Thursday’s session as worries about souring relations between the world’s two biggest economies and an expected executive order related to social media companies weighed on the sentiment.

While investors have kept a close eye on the rise in Sino-U.S. tensions in recent weeks, Wall Street’s main indexes are set to end May with second straight month of gains on belief that the economy would rebound from the virus-led downturn.

A day after Trump signed the order threatening social media firms with new regulations over free speech, Twitter Inc (TWTR.N) hid a tweet from the President and accused him of breaking its rules by “glorifying violence”.

Twitter shares were down about 0.9% in premarket trading.

At 6:13 a.m. ET, Dow e-minis 1YMcv1 were down 91 points, or 0.36%. S&P 500 e-minis EScv1 were down 8.25 points, or 0.27% and Nasdaq 100 e-minis NQcv1 were down 26.75 points, or 0.28%.

Focus is also on Federal Reserve Chair Jerome Powell who will speak in a public webcast, where he is expected to detail the central bank’s next phase of coronavirus response.

Among stocks, Salesforce.com Inc (CRM.N) slipped 2.9% as the cloud-based business software maker cut its annual revenue and profit forecasts.

Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva

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