US STOCKS-Futures pare gains after Trump comments, ECB forecast

U.S. stock index futures gave back most of their gains on Thursday after President Donald Trump said he would decide on more China tariffs "probably right after the G20," stoking fears of a further escalation in trade tensions. The comments follow Trump's threat overnight to hit China with tariffs on "at least" another $300 billion worth of Chinese goods.

"It feels like an escalation of tension and maybe an elongated trade war and we might have to recalibrate lower," said Art Hogan, chief market strategist at National Securities in New York. "We're up significantly in two days, at that place it doesn't take much to roll markets over."

Adding to the concerns, the European Central Bank marginally cut its growth forecasts for the next two years, acknowledging the risk that Europe's slowdown will be longer and deeper than expected. ECB President Mario Draghi said risks to the region remain tilted to the downside, citing geopolitical uncertainty, the rising threat of protectionism and vulnerabilities in emerging markets.

At 8:55 a.m. ET, Dow e-minis were up 22 points, or 0.09%. S&P 500 e-minis were up 2 points, or 0.07% and Nasdaq 100 e-minis were up 1.5 points, or 0.02%. After a surprise flare up in the trade spat that whipsawed markets in May, Wall Street's main indexes are on pace for their first weekly gain in at least a month after top Federal Reserve officials, including Chairman Jerome Powell, hinted at a rate cut.

U.S. interest rates futures point to rising expectations among traders that the central bank will reduce borrowing costs at its July policy meeting.