U.S. stock-index futures pointed to a lower open on Monday, with trade policy still in focus and technology stocks poised to extend their recent decline, indicating that the volatility that marked the final weeks of the first quarter hadn’t yet fully played out.
In the first trading session of the second quarter, as well as the first day since a long holiday weekend, investors were also looking ahead to manufacturing surveys to gauge the strength of the economy.
Read: Why stock-market investors should welcome the arrival of April
What are the main benchmarks doing?
Dow Jones Industrial Average futures YMM8, -0.53% fell 136 points, or 0.6%, to 24,010, while S&P 500 futures ESM8, -0.39% ESM8, -0.39% dipped 11.50 points, or 0.4%, to 2,631.50. Nasdaq-100 futures NQM8, -0.75% dropped 53.50 points, or 0.8%, to 6,539.25.
Thursday marked the end of the month and quarter for major indexes as markets were closed in observance for Good Friday. The Dow Jones Industrial Average and the S&P 500 index broke a streak of quarterly gains and, along with the Nasdaq, logged steep declines for March. Historically, April has been a strong month for stocks, including the strongest of the year for the Dow.
Stocks rallied Thursday, though, with the Dow DJIA, +1.07% closing up 309 points, or 1.2%, to 24,143. The S&P 500 SPX, +1.38% and Nasdaq Composite Index COMP, +1.64% gained 1.4% and 1.6%, respectively, in a volatile session.
Read: What struggled in the first quarter? Stocks, bonds, basically everything
What’s driving markets
Investors will return from the long Easter weekend to fresh developments on the trade-war front. China announced tariffs on about 130 U.S. goods, including a 25% penalty slapped on U.S. pork and 15% on fruit. The news means China has made good on its threat to retaliate against the Trump administration’s tariffs on Chinese steel and aluminum imports.
Read: Steel, cocoa among first-quarter gainers, but coal, sugar take biggest hits
And investors will be watching to see if tech stocks can keep up a rebound from late last week. Fund managers added big-name tech stocks at the end of the quarter, despite regulatory concerns as of late that have pressured companies such as Facebook Inc. FB, +4.42% Tesla Inc. TSLA, +3.24% and Amazon.com Inc. AMZN, +1.11%
President Donald Trump increased his attack on Amazon’s business practices on Saturday, tweeting how the U.S. Postal Service loses money each time it delivers an Amazon package, a statement that others have contradicted. Amazon shares were lower premarket after gaining over 1% Thursday.
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What data are in focus?
Economic data feature the Markit manufacturing purchasing managers index for March due at 9:45 a.m. Eastern Time, followed by the Institute for Supply Management manufacturing index for March at 10 a.m. Eastern and construction spending for February at the same time.
Data highlights for the rest of week include Friday’s March payrolls report, where some economists expect hiring will slow down.
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What are strategists saying?
“The debate over global trade continues to simmer, and the regulation of technology sectors amidst the Facebook security breach has steadily eroded investor sentiments,” said Stephen Innes, head of Asian-Pacific trading at Oanda, in a note to clients.
“Investors continue to struggle with the new normal of higher market volatility, and lower returns after the S&P 500 recorded its first quarterly losses since 2015.”
Which stocks are in focus?
Tesla could be in the spotlight after the National Transportation Safety Board said it was “unhappy” that the electric-car maker revealed detailed information about a fatal California crash. Meanwhile, Tesla CEO Elon Musk sent out a series of April Fool’s tweets about the company going bankrupt. That is after shares sank around 22% in March. The stock was down about 3% in premarket trading, though one analyst said the “perfect storm” of bad news had created a buying opportunity.
CEOs of public companies shouldn't be putting out tweets like this Elon. Let's get real here, stay focused on what you need to be doing for shareholders.
— Brian Sozzi (@BrianSozzi) April 2, 2018
Toronto-based Hudson’s Bay Co. HBC, +3.60% could face some pressure after news hackers stole credit- and debit-card data from more than 5 million customers of its retail brands Saks Fifth Avenue, Saks Off Fifth and Lord & Taylor Stores.
Humana Inc. HUM, +0.48% rose in premarket trading after The Wall Street Journal late Thursday reported that Walmart Inc. WMT, +1.37% was in early talks to buy the company.
Alkermes PLC ALKS, -2.14% sank 22% before the bell after the company received a “refusal to file” letter from the Food and Drug Administration regarding its new drug application for ALKS 5461, a treatment for major depressive disorder.
What are other markets doing?
European stocks SXXP, +0.44% SXXP, +0.44% were closed for Easter Monday. Asian stock markets NIK, -0.31% HSI, +0.24% had a mixed day.
Oil prices CLK8, -0.02% were trading slightly higher, just above $65 a barrel. Gold futures GCJ8, +0.78% rose, while the ICE U.S. Dollar Index DXY, -0.15% DXY, -0.15% was down 0.2% at 89.89.