Investing.com - U.S. futures pointed to a negative open on Monday, following global stocks lower as investors fretted over new threats of tariff retaliation against the U.S.
The blue-chip Dow futures fell 157 points, or 0.65%, by 6:49AM ET (10:49GMT), the S&P 500 futures lost 15 points, or 0.56%, while the tech-heavy Nasdaq 100 futures traded down 50 points, or 0.50%.
The European Union has responded to U.S. President Donald Trump’s threats to impose levies on imported vehicles, telling the U.S. Commerce Department that tariffs on cars and car parts were unjustifiable and did not make economic sense.
The EU warned that the U.S. tariffs would actually hurt the American economy by imposing higher costs on U.S. manufactures and said a 25% tariff would have an initial $13 to $14 billion negative impact on U.S. gross domestic product.
In addition to that negative impact, the EU further warned that it would likely lead to counter-measures by its trading partners on $294 billion of U.S. exports.
Trump said last week that the government was completing its study and suggested the U.S. would take action soon.
The latest European retaliatory threat came as the U.S. prepares to impose $34 billion of tariffs on Chinese exports on Friday. Beijing is expected to respond tit-for-tat.
Additionally, Canadian tariffs on about $13 billion worth of American goods went into effect on Sunday in a response to Trump administration tariffs on steel and aluminum.
Outside of trade tensions, investors will keep an eye on Monday’s economic data. The ISM's manufacturing survey for June, as well as a report on construction spending for May will both be released at 10:00AM ET (14:00GMT).
While waiting for the data, the U.S. dollar index, which measures the greenback against a basket of six major currencies, rose 0.31% to trade at 94.52 by 6:50AM ET (10:50GMT). The dollar got a boost from weakness seen in the euro after Germany's interior minister offered to resign amid an escalating row over immigration policy, throwing into doubt the future of Chancellor Angela Merkel’s coalition government.
In company news, Tesla (NASDAQ:TSLA) saw shares jump 6% in pre-market trade on Monday after a report that the company had met a production goal of producing 5,000 Tesla Model 3 vehicles in a week. While not confirming the Reuters report, Chief executive Elon Musk tweeted late Sunday that 7,000 cars, including the Model 3s, had been produced in seven days.
Meanwhile, oil prices were under pressure after U.S. President Donald Trump surprised traders by announcing an impromptu agreement with Saudi Arabia to add more supply to increasingly tight oil markets.
In an early morning tweet on Saturday, Trump said Saudi Arabia's King Salman had agreed to his request to increase crude production “maybe up to" 2 million barrels to help offset a decline in supply from Iran and Venezuela.
U.S. crude futures slipped 0.05% to $74.11 by 6:51AM ET (10:51GMT), while Brent oil lost 0.68% at $78.69.
Elsewhere, European markets were under pressure, as automakers and miners, seen among the sectors most at risk of a trade war, led losses. Among national indexes, Germany's DAX index slumped as concerns about Chancellor Angela Merkel's coalition weighed on sentiment.
Earlier, Chinese markets led losses in Asia, with major markets in the region closing sharply lower. The Shanghai Composite tumbled 2.5% and fell further into a bear market, while the yuan, fresh off its worst month on record, continued to lose ground against the dollar.