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Dow Jones & Nasdaq futures volatile on US-China trade deal confusion

Comments from White House Trade Advisor Peter Navarro caused chaos in US futures markets heading into Tuesday’s session.

Nasdaq and Dow Jones futures in focus

US futures markets moved sharply lower around 9:25pm (New York time) – before mostly recovering those losses by 10:26pm – after confusion over the status of the US-China trade deal plunged markets into chaos.

These moves were triggered by an interview conducted by Fox News, where White House Trade Advisor Peter Navarro, speaking of the US-China trade deal, said: ‘It’s over.’

With suggestions that the US-China trade deal was off, Dow futures fell by over 400 points in just 15 minutes.

‘Here's the turning point,’ Mr Navarro went on to say. ‘They came here on January 15th to sign that trade deal, and that was a full two months after they knew the virus was out and about.’

Shortly after however, Bloomberg reported that these comments were taken out of context, with Mr Navarro saying:

‘My comments have been taken wildly out of context. They had nothing at all to do with the Phase I trade deal, which continues in place. I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world.'

Adding to that, US President Donald Trump went on to tweet that ‘The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!’

At the time of writing (11:05pm New York time), Nasdaq futures were up around 0.6 points or 0.01%; while Dow Jones futures were trading 3.9 points or 0.02% lower.

Monday’s session at a glance

After registering a strong day of gains on Monday – with Apple rising 2.62%, Amazon adding 1.45%, Microsoft gaining 2.78% and Facebook eking out a gain of 0.18% – investors will likely be keen to see whether these key US tech stocks can maintain their momentum during Tuesday's session.

The Nasdaq Composite finished out Monday’s session up 20 points or 0.65%, at the 10,056 point level.

By comparison, the Dow Jones Industrial Average added 156 points or 0.59%, to close out yesterday’s session at the 26,024 point level.

On a more granular level, the best performing Dow constituents were NIKE, Microsoft and Apple; while the worst performing were Merck, American Express and Walgreens Boots Alliance.

Key data releases on Tuesday

Looking at the upcoming key US economic data releases: IHS Markit US services and manufacturing PMI data (flash), covering June, as well as new home sales data, covering May – is set to be released on Tuesday.

Commenting on these PMI data releases, IG Market Analyst Kyle Rodda said:

‘Today’s trade will be highlighted a series of PMI surveys released across the globe. Though not expected to rattle markets too much, the monthly “flash” surveys will provide a glimpse into how business activity is faring as the global economy begins its re-opening.’

Speaking of the US data releases in particular, Mr Rodda finished by saying that ‘Across the Atlantic, the US survey is expected to show manufacturing State-side returned to expansion.’

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