US STOCKS-Futures fall as Hong Kong bill escalates U.S.-China tensions

U.S. stock index futures fell on Wednesday as escalating political tensions between Washington and Beijing sparked fears that the two sides would fail to reach a trade agreement soon.

Beijing on Wednesday condemned U.S. legislation aimed at protecting human rights in Hong Kong amid prolonged anti-government protests, adding to jitters from a threat by President Donald Trump to raise tariffs on Chinese imports if a trade deal was not finalized. Trade-exposed technology stocks and industrials such as Intel Corp, Micron Technology Inc, Caterpillar Inc, and Apple Inc fell between 0.3% and 0.7% premarket. Most U.S.-listed Chinese stocks also dipped.

The world's top two economies came tantalizingly close to a deal in May after a year of tariffs on each other's goods, before talks fell apart. Hopes had since risen that Washington and Beijing would strike at least a partial deal, with Wall Street's main indexes scaling record highs this month.

The benchmark S&P 500 and blue-chip Dow Jones retreated slightly at the close on Tuesday as dour forecasts by retailers Home Depot Inc and Kohl's Corp raised concerns about the strength of U.S. consumer spending. However, on Wednesday, strong results by retailers Lowe's Cos Inc and Target Corp sent their shares up 4.1% and 9.6%, respectively, adding to a fairly strong third-quarter earnings season and assuaging investor nerves about the impact of the trade war.

The latest data has pointed to a resilient U.S. economy, but recession fears are creeping back, with the gap between 2-year and 10-year Treasury yields at its narrowest in more than two weeks. Focus now turns to minutes from the Federal Reserve's latest policy meeting for clues to its stance on monetary policy. The central bank cut interest rates for the third time this year in October but signaled it may be done with rate easing for now.

At 7:44 a.m. ET, Dow e-minis were down 89 points, or 0.32%. S&P 500 e-minis were down 8.25 points, or 0.26% and Nasdaq 100 e-minis were down 30.75 points, or 0.37%. Bristol-Myers Squibb Co fell about 1% after a late-stage trial testing a combination of its cancer drugs missed the main goal of preventing skin cancer from recurring in a certain group of patients.

Apparel retailer Urban Outfitters Inc dropped 15.7% after reporting lower-than-expected quarterly sales, hit by weaker demand for its namesake brand.