By Chris Matthews and Mark DeCambre, MarketWatch

U.S. stock benchmarks on Wednesday were poised to slide for a third straight session, albeit with futures declining with less gusto than Tuesday, as worries about a U.S.-China trade agreement this week dogged marks, resulting in the worst day for the Dow in about four months.

How are the benchmark indexes faring?

Futures for the Dow Jones Industrial Average were down 112 points, or 0.4%, at 25,861, those for the S&P 500 declined by 14.80 points, or 0.5%, at 2,876, while Nasdaq-100 futures fell 45.75 points, or 0.6%, at 7,628.25.

Opinion:The S&P 500's return the next five years? Zero, says Mauboussin (http://www.marketwatch.com/story/the-sp-500s-return-the-next-five-years-zero-says-mauboussin-2019-05-08)

On Tuesday (http://www.marketwatch.com/story/us-stock-futures-lower-as-trade-tensions-stay-in-the-spotlight-2019-05-07), the Dow tumbled 473.39 points, or 1.8%, to 25,965.09, suffering its largest percentage decline since Jan 3, while the S&P 500 index dropped 48.42 points, or 1.7%, to 2,884.05. The Nasdaq Composite Index fell 159.53 points, or 2%, to 7,963.76.

The S&P 500 and Nasdaq saw their biggest daily declines since March 22, according to FactSet data.

Read:The stock market is on pace for its worst month since December rout (http://www.marketwatch.com/story/the-stock-market-is-on-pace-for-its-worst-month-since-december-routas-volatility-returns-with-a-vengeance-2019-05-07)

What's driving markets?

U.S. stocks are on track for their longest string of consecutive daily losses since a five-session skid ended March 8, as Sino-American tariff tensions have buffeted assets perceived as risky, catching many investors who had anticipated a tidy pact to the protracted talks coming to fruition soon.

Still, Beijing has said top trade envoys, including Vice Premier Liu He, will head to Washington on Thursday to resume negotiations. U.S. officials had accused Beijing of reneging on its side of the bargain and threatened to raise tariffs on $200 billion of Chinese imports to 25% from Friday. Reports from Reuters indicated that Chinese officials were reluctant to sign new trade terms into law.

Reuters on Wednesday reported (https://www.reuters.com/article/us-usa-trade-china-backtracking-exclusiv/exclusive-china-backtracked-on-nearly-all-aspects-of-us-trade-deal-sources-idUSKCN1SE0WJ) that China's diplomatic contingent attempted to revamp a nearly 150-page draft trade agreement last Friday, raising the ire of U.S. negotiators and perhaps prompting a Sunday tweet from President Donald Trump, threatening higher import duties

U.S. Trade Representative Robert Lighthizer said Monday that the Trump administration will increase tariffs (http://www.marketwatch.com/story/lighthizer-accuses-china-of-reneging-on-promises-says-tariffs-will-rise-friday-2019-05-06) on $200 billion in Chinese goods early Friday. The prospect of higher tariffs had been first raised on Sunday by President Donald Trump, rattling investors who had anticipated better progress toward a near-term resolution between the two superpowers.

Read:With Trump threatening to tighten the trade screws, here's a look at what tariffs have done so far (http://www.marketwatch.com/story/with-trump-threatening-to-tighten-the-trade-screws-heres-a-look-at-what-tariffs-have-done-so-far-2019-05-06)

What are strategists saying?

"The overhang of tariffs continued to eclipse most other news Tuesday, and this time, the late-day rescue squad arrived a bit too late to clean up most of the carnage," wrote J.J. Kinahan, chief market strategist at TD Ameritrade, in comments after Tuesday's close of trade. He noted that most of the stocks that have driven the market's extended rally since January were the hardest hit.

But Kinahan said it's important to put into perspective that major equity benchmarks remain not far from records. Higher volatility is the most likely a byproduct of the current U.S.-China trade narrative, but may not be the only geopolitical headline with potential to unsettle.

"It seems like a long week, but it's only Tuesday. Barring some kind of major breakthrough overnight, it's possible Wall Street could open Wednesday morning with the same tariff overhang that weighed on it today. Another thing to consider is that as earnings season dies down, the tariff news might not have many rivals for headlines. Buckle up," he said.

Which stocks are in focus?

Lyft Inc. shares will be in focus Wednesday after the ride-hailing company reported quarterly earnings for the first time since its initial public offering in March. The company reported first-quarter losses that were wider than expected (http://www.marketwatch.com/story/lyft-reports-continuing-large-losses-in-first-earnings-since-ipo-but-sales-beat-expectations-2019-05-07), but revenue that topped expectations. The stock fell 2.8% before the start of trade.

Shares of Coty Inc. (COTY) tumbled 9.3% in premarket trade Wednesday, after the company reported a narrower loss (http://www.marketwatch.com/story/coty-narrows-quarterly-loss-but-revenue-falls-short-2019-05-08) for the fiscal third quarter, ended March 31, than the previous three months, but revenue that fell 10.4%, below consensus expectations.

Nautilus Inc. (NLS) stock plunged more than 19% in premarket action Wednesday, after the exercise equipment maker reported a first-quarter loss of 29 cents per share, versus analysts expectations of just 3 cents per share, according to FactSet.

TripAdvisor Inc. (TRIP) reported earnings Tuesday evening, with the company posting first-quarter earnings that beat analyst expectations, but falling revenue (http://www.marketwatch.com/story/tripadvisor-stock-falls-more-than-7-after-company-misses-q1-sales-2019-05-07) that widely missed forecasts. The stock fell 7.2% in off-hours trading.

Radio-frequency component maker Qorvo Inc. (QRVO) also reported results Tuesday evening (http://www.marketwatch.com/story/qorvo-stock-rallies-as-results-outlook-top-street-view-2019-05-07), announcing first-quarter sales and profits that beat Wall Street expectations. Shares rose 5.2% before the start of trade Wednesday.

Shares of Electronic Arts. Inc. (EA) rose 6.8% in premarket action, after the videogame maker reported better-than-expected net bookings (http://www.marketwatch.com/story/electronic-arts-stock-surges-after-strong-forecast-sales-2019-05-07) and strong fiscal 2020 forecast, late Tuesday.

Shares of Chesapeake Energy Corp. (CHK) fell 4.7% before the bell Wednesday, after the oil and natural gas company reported a wider first-quarter loss and revenue that fell short of expectations.

What's on the economic calendar?

In a light day for economic data, Lael Brainard, member of the Federal Reserve Board of Governors was scheduled to deliver a speech at 8:30 a.m. Eastern Time.

How are other markets trading?

In Asia (http://www.marketwatch.com/story/asian-markets-mixed-as-traders-weigh-us-china-trade-dispute-2019-05-06), the Shanghai Composite Index fell 1.1%, while the Nikkei 225 , in its second day from an extended holiday break, declined by a sharper 1.5%, following a similar drop on Tuesday. European stocks were all lower (http://www.marketwatch.com/story/europe-markets-higher-as-investors-shake-off-trade-fears-2019-05-08), with the FTSE 100 index down 0.6%.

Gold was trading higher (http://www.marketwatch.com/story/gold-at-one-week-high-as-stock-losses-look-to-persist-2019-05-08), while the U.S. Dollar Index climbed (http://www.marketwatch.com/story/new-zealand-dollar-falls-after-central-bank-cuts-rate-us-dollar-slips-2019-05-08) and crude oil edged higher (http://www.marketwatch.com/story/us-crude-oil-climbs-up-from-roughly-one-month-low-as-iran-trade-deal-tensions-tug-at-market-2019-05-08).

 

(END) Dow Jones Newswires

May 08, 2019 08:35 ET (12:35 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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