Stock futures fall on increased US-China tensions

Dow members Verizon and American Express will report earnings

U.S. equity futures are suggesting a decline of 0.2 percent when the Friday Wall Street session begins.

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China announced the closure of the U.S. consulate in the western city of Chengdu. The move was in retaliation for the U.S. order earlier this week to close the Chinese consulate in Houston, Texas.

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The latest dust up between the two biggest economies comes amid allegations of theft of U.S. intellectual property — including by Chinese researchers with military and government connections — for Beijing’s benefit.

In Asia, Shanghai led regional declines, with its Composite index giving up 3.9 percent, while the Hang Seng in Hong Kong lost 2.2 percent. Markets in Japan were closed for a holiday.

In Europe, London's FTSE fell 0.8 percent, Germany's DAX dropped 1.4 percent and France's CAC declined 1.2 percent.

CHINA TELLS US TO CLOSE CONSULATE IN CHENGDU IN GROWING SPAT

Analysts said investors also are wary over the unclear prognosis for further stimulus for the U.S. economy, just as the end of a previous package of extra support for those made jobless by the pandemic looms.

Republicans in the Senate were set to unveil their proposals for a $1 trillion COVID-19 rescue package Thursday morning, but that got delayed. Finding a compromise with the Democratic-controlled House of Representatives could prove more difficult than it was in March, when Congress produced a $2 trillion rescue package.

A report Thursday that the tally of American workers applying or unemployment benefits rose last week by 109,000 to a little more than 1.4 million broke a stretch of 15 straight weeks of improvements. That shook investor optimism that the recession might be shorter lived than expected.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES26501.6-157.51-0.59%
SP500S&P 5003269.96-40.15-1.21%
I:COMPNASDAQ COMPOSITE INDEX10911.59093-274.00-2.45%

In the Thursday session,  the S&P 500 fell 1.2 percent, the Dow Jones Industrial Average lost 1.3 percent and the Nasdaq composite fell 2.3 percent.

Technology stocks had the sharpest declines after a better-than-expected profit report from Microsoft failed to satisfy investors who were expecting even more. Because Microsoft is one of the largest U.S. stocks by market value, its movements have an outsized effect on indexes like the S&P 500.

The week will wrap up with quarterly results from a pair of Dow members: telecom conglomerate Verizon Communications and financial services giant American Express..

Gold for delivery in August is off $4.50 to $1,885.60 per ounce. It rose $24.90 on Thursday to settle at $1,890.00 per ounce.

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Benchmark U.S. crude advanced 32 cents to $41.40 in electronic trading on the New York Mercantile Exchange. It gave up 83 cents to $41.07 per barrel on Thursday. Brent crude oil for September delivery added 31 cents to $43.62. It fell 98 cents to $43.31 a barrel overnight.

The Associated Press contributed to this story.