U.S. stock futures drop after Trump slaps new tariffs on China

U.S. stock futures dropped and Asian shares are expected to come under renewed pressure on Tuesday after U.S. President Donald Trump said he will impose 10 percent U.S. tariffs on about $200 billion worth of Chinese imports.

While he spared smartwatches from Apple and some other consumer products such as bicycle helmets, he warned that if China takes retaliatory action he we will pursue another tariff on approximately $267 billion of goods.

"Considering his latest comments as well as recent falls in his support, it is hard to expect Trump to soften his stance on trade in the near future," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

S&P500 E-mini futures dropped 0.35 percent in early trade.

That came after all three major U.S. indexes dropped on Monday, with the tech-heavy Nasdaq posting its biggest percentage loss since late July.

Apple Inc and Amazon.com, the world's top two companies by market capitalization, fell 2.6 percent and 3.2 percent respectively on worries about new tariffs, which were unveiled after U.S. market close on Monday.

Nikkei futures in Chicago traded slightly below the contract's close in Japan on Friday. Japanese markets were closed on Monday for a holiday.

In the currency market, the yen gained while the risk-sensitive Australian dollar dropped.

The yen strengthened slightly to 111.74 per dollar, off Friday's two-month low of 112.175.

The Australian dollar shed 0.4 percent in early trade to $0.7148.

The euro stood little changed at $1.1673.

The 10-year U.S. Treasuries yield hit near four-month high of 3.0220 percent on Monday, extending its rise on the back of a recent run of solid U.S. data, before stepping back to 2.994 percent.

Oil prices also dropped on worries rising trade tension between the U.S. and China could dent global crude demand.

U.S. West Texas Intermediate (WTI) crude futures fell stood down 0.5 percent at $68.57 a barrel. 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)