US STOCKS-Futures slide as Trump threatens tariffs on Mexico

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* Trump threatens tariffs on Mexico in surprise tweet
* U.S. automakers tumble premarket
* U.S. Treasury yield curve inversion deepens
* Futures fall: Dow 1.11%, S&P 1.16%, Nasdaq 1.40%

By Shreyashi Sanyal
May 31 (Reuters) - U.S. stock index futures tumbled on
Friday, as investors feared that President Donald Trump's shock
threat of tariffs on Mexico could risk pushing the world's
largest economy into a recession.
The United States will impose a 5% tariff on all goods
coming from Mexico starting on June 10 until illegal immigration
is stopped, Trump said in a tweet late on Thursday. Trump's latest threat spread more gloom in the markets,
which have already been roiled by an escalating trade war
between the United States and China.
U.S. Treasury yields fell to new multi-month lows, while the
yield curve, as measured in the gap between three-month
US3MT=RR and 10-year bond yields US10YT=RR , remained heavily
inverted. An inversion in the yield curve is seen by some as an
indicator that a recession is likely in one to two years. US/
U.S. automakers were the worst hit from Trump's announcement
as they have long built vehicles in Mexico, taking advantage of
the country's cheap labor, trade deals and proximity to the
United States.
Shares of General Motors Co GM.N slid 4.7%, while those of
Ford Motor Co F.N fell 3.6%.
FAANG stocks - Facebook Inc FB.O , Apple Inc AAPL.O ,
Alphabet Inc GOOGL.O , Netflix Inc NFLX.O and Amazon.com Inc
AMZN.O - were also down between 1.4% and 1.7%.
At 7:13 a.m. ET, Dow e-minis 1YMc1 were down 279 points,
or 1.11%. S&P 500 e-minis ESc1 were down 32.25 points, or
1.16% and Nasdaq 100 e-minis NQc1 were down 101.75 points, or
1.4%.
Wall Street's three main indexes are down more than 5% for
the month.
China's disappointing manufacturing data for the month of
May also added to the woes.
Investors are now awaiting an inflation report from the
Commerce Department at 8:30 a.m. ET that is expected to show the
personal consumption expenditures (PCE) price index rose to a
reading of 0.3% in April from 0.1% in March.
Core PCE, which excludes volatile food and energy
components, is the Federal Reserve's preferred gauge of
inflation and is expected to show a rise of 0.2% in April from a
flattish level in March.
Among other stocks, Gap Inc GPS.N tumbled 14.6% after the
apparel retailer cut its 2019 profit forecast and posted the
biggest drop in same-store sales in at least three years at its
Gap brand. Constellation Brands STZ.N , which has substantial brewery
operations in Mexico, dropped 5.6%.