U.S. stock futures and the dollar were both sliding on Friday as Asian markets rallied after President Trump signaled he wouldn’t rush to raise tariffs on China.
The moves came after Trump said he “would rather not” hike levies on imports from China, but added that the option to do so gives Washington “tremendous power” over Beijing. The president has yet to make any big moves on tariffs since he returned to the White House, although he has pledged to impose a 25% tax on goods from Canada and Mexico on Feb. 1.
“Clearly these are off the cuff remarks but it has left the overnight market feeling like there’s a scenario where China escapes the worst of the tariff regime,” Deutsche Bank analyst Jim Reid said. “I suspect there’s plenty more time for a more aggressive approach.”
Chinese stocks gained after Trump’s comments: Hong Kong’s mainland Hang Seng Index ended Friday up 1.9%, and the mainland CSI 300 gauge closed 0.8% higher. The yuan climbed against the dollar, and the yen also rose against the greenback after the Bank of Japan raised interest rates for the first time since July.
U.S. stocks were edging lower ahead of the opening bell, although their small moves suggested the market wasn’t taking much notice of Trump’s comments. Futures tracking the Dow Jones Industrial Average fell 58 points, or 0.1%. S&P 500 futures were also down 0.1% after the benchmark hit a record high Thursday, and contracts tied to the Nasdaq 100 also dropped 0.2%.
Asian currencies’ gains sent the WSJ Dollar Index, which tracks the greenback against 16 foreign rivals, down 0.5%. Bond yields were up slightly over the past 24 hours, with the yield on the 10-year U.S. Treasury note up about 2 basis points to 4.63%.
