US STOCKS-Futures decline ahead of inflation reading

Reuters

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    * Futures off: Dow 0.24%, S&P 0.23%, Nasdaq 0.42% 

    By Shreyashi   Sanyal
    June 12 (Reuters) - U.S. stock index futures dropped on
Wednesday ahead of inflation data as trade worries returned to
the forefront and weighed on sentiment after Washington took a
tough stance on its talks with China.
    President Donald Trump said he was holding up a trade deal
with China and had no interest in moving ahead unless Beijing
agrees to four or five major points, which led the blue-chip Dow
index  .DJI  to snap a six-day winning streak on Tuesday.
 urn:newsml:reuters.com:*:nL2N23I153
    With under three weeks to go before proposed talks between
the United States and Chinese leaders, sources say there has
been little preparation for a meeting even as the health of the
world economy is at stake.  urn:newsml:reuters.com:*:nL2N23D13K
    Trump also said that interest rates were "way too high",
ahead of a reading on U.S. inflation that could shift the odds
towards a cut in rates as soon as July.  urn:newsml:reuters.com:*:nW1N1ZU02F
    Hopes that the Federal Reserve will act to counter a slowing
global economy due to escalating trade war have spurred a rally
in stocks this month, with the S&P 500 index  .SPX  up about 5%
so far in June.
    Fed policymakers will meet on June 18-19 and markets have
priced in at least two rate cuts by the end of 2019. Fed fund
futures  FEDWATCH  imply around an 80% chance of an easing as
soon as July.
    That might change depending on what U.S. consumer price data
show at 8:30 a.m. ET. Headline inflation is expected to slow to
1.9%, with the core rate, excluding volatile items such as food
and energy, steady at 2.1% on a year-on-year basis for May.
    Investors will closely watch the data for further evidence
of inflation after U.S. producer prices increased solidly for a
second straight month in May, in line with expectations of
economists polled by Reuters.  urn:newsml:reuters.com:*:nL2N23H1AP 
    Meanwhile, concerns of a slowdown in China rose as data
showed factory inflation slowed in May and the country reported
the worst-ever monthly sales drop.  urn:newsml:reuters.com:*:nL4N23H1U6  urn:newsml:reuters.com:*:nL4N23J1NN 
    At 7:17 a.m. ET, Dow e-minis  1YMc1  were down 63 points, or
0.24%. S&P 500 e-minis  ESc1  were down 6.5 points, or 0.23% and
Nasdaq 100 e-minis  NQc1  were down 31.25 points, or 0.42%.    
    Trade-sensitive Caterpillar Inc  CAT.N  dipped 0.1%, while
Boeing Co  BA.N  dropped 0.7% in premarket trading.
    Chipmakers and semiconductor equipment makers, which get a
sizeable portion of revenue from China, declined, with Micron
Technology Inc  MU.O , Nvidia Corp  NVDA.O  and Applied
Materials Inc  AMAT.O  trading down between 1.6% and 3%.        
    Qualcomm Inc  QCOM.O  slipped 4% after smartphone maker LG
Electronics Inc  066570.KS  and U.S. Federal Trade Commission
opposed the chip supplier's efforts to put a sweeping U.S.
antitrust decision on hold.  urn:newsml:reuters.com:*:nL2N23J00D
    Medidata Solutions  MDSO.O  fell 4.3% after France's
Dassault Systemes  DAST.PA  agreed to buy the U.S. firm focused
on clinical trials for $92.25 per share, a discount of 3% to its
last close.  urn:newsml:reuters.com:*:nL8N23J0JT

 (Reporting by Shreyashi Sanyal and Amy Caren Daniel in
Bengaluru; Editing by Arun Koyyur)
 ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ;
Reuters Messaging:
Shreyashi.Sanyal.thomsonreuters.com@reuters.net))

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