(Bloomberg) -- U.S. stock-index futures tanked after China’s yuan sank beyond 7 per dollar for the first time in more than a decade, reflecting dimmer hopes for a resolution to the nations’ trade war.
S&P 500 Index futures contracts expiring in September fell as much as 1.2% after China’s central bank weakened its daily currency fixing past the key level, fueling speculation that Beijing was allowing currency depreciation to counter President Donald Trump’s latest tariff threat. Dow Jones Industrial Average contracts shed as much as 1%, while those on the Nasdaq 100 slipped as much as 1.5%. The S&P 500 Index closed lower Friday, in its worst week since the sell-off in December.
Losses in Asian markets intensified after Bloomberg reported that China asked its state-owned enterprises to suspend imports of U.S. agricultural products in response to Trump’s latest tariff proposal. The U.S. president on Thursday suggested adding 10% tariffs on a further $300 billion in Chinese imports from Sept. 1.
“It’s become clear that despite the economics of the trade war being very clear cut, and a quick resolution very desirable, the politics of it have become murkier,” said Michael McCarthy, chief market strategist at CMC Markets.
