Trade tensions likely to impact US stocks; Wall Street to open flat

Wall Street was set to open flat on Thursday as the uncertainty of trade talks between the United States and China offset optimism after Britain's parliament voted to reject a disorderly Brexit. Bloomberg reported that a meeting between President Donald Trump and China's Xi Jinping to sign an agreement to end their trade dispute won't occur this month and is more likely to happen in April at the earliest. A day earlier, U.S. President Donald Trump said he was in no rush to complete a trade pact with China.

"The situation with the trade is causing indigestion for investors early on. The deeper concern that is starting to creep up is that there is no sense of urgency at this point," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. Tariff-sensitive Caterpillar Inc fell 0.7 per cent in premarket trade while chipmakers, which rely on China for a large portion of their revenue also lost ground.

Boeing, the single largest U.S. exporter to China, dipped 0.4 per cent. The world's largest planemaker had its own troubles this week after its money-spinning 737 MAX jetliners were grounded globally following a recent fatal crash in Ethiopia. "We've had a strong run in markets this week and investors are taking a pause to digest the gains and use the delay in trade talks as an excuse to take a break from buying," Bakhos said.

The S&P and Nasdaq have posted three consecutive sessions of gains this week, buoyed by domestic data that underscored the Federal Reserve's patient stance on future interest rate hikes. A dovish Federal Reserve and hopes of a U.S.-China trade deal have helped the S&P rally about 12 per cent this year and has put the benchmark index just 4.3 per cent away from its September record closing high.

UK lawmakers on Wednesday voted in favour of a motion that ruled out a potentially disorderly "no-deal" Brexit under any circumstance, though another crucial vote to delay leaving the European Union is pending on Thursday evening. Apple Inc rose 1 per cent after brokerage Cowen and Co started coverage of the iPhone maker with "outperform" rating. Its shares kept Nasdaq futures afloat.

At 8:22 a.m. ET, Dow e-minis were down 24 points, or 0.09 per cent. S&P 500 e-minis were down 1.5 points, or 0.05 per cent and Nasdaq 100 e-minis were up 1.25 points, or 0.02 per cent. Among stocks, Facebook Inc fell 1.9 per cent as the world's largest social network struggled to restore its services fully after a 17-hour partial outage.

Johnson & Johnson dropped 1.8 per cent after a California jury awarded $29 million to a woman who said that asbestos in the company's talcum-powder-based products caused her cancer. Economic data at 10:00 a.m. ET is expected to show new home sales fell to 620,000 units in January, from 621,000 units in December.