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U.S. Stocks May Give Back Ground After Yesterday's Rally


After moving sharply higher over the course of the previous session, stocks are likely to give back some ground in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 135 points.

Renewed concerns about the U.S.-China trade war may weigh on the markets after a report from Bloomberg said President Donald Trump's administration is holding off on decisions about licenses for U.S. companies to restart business with Chinese tech giant Huawei.

Trump previously said his administration would make "timely licensing decisions" but has reportedly decided to delay the decisions in response to China halting its purchases of U.S. agricultural products.

China decided to stop buying U.S. agricultural products in retaliation against Trump's announcement last week that he plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.

The report may weigh on U.S. chipmakers, which require a special license to sell goods to Huawei after the company was added to a U.S. trade blacklist in May over national security concerns.

In U.S. economic news, the Labor Department released a report showing a modest increase in producer prices in the month of July.

The Labor Department said its producer price index for final demand rose by 0.2 percent in July after inching up by 0.1 percent in both May and June. The uptick in prices matched economist estimates.

Meanwhile, the report said core producer prices, which exclude food and energy prices, edged down by 0.1 percent in July after climbing by 0.3 percent in June.

The modest pullback in core producer prices came as a surprise to economists, who had expected core prices to rise by 0.2 percent.

Following the recovery from an early sell-off on Wednesday, stocks extended the upward move with a substantial rally during trading on Thursday. With the jump on the day, the Nasdaq and the S&P 500 more than offset Monday's steep losses.

The major averages saw further upside in late-day trading, closing just off their highs of the session. The Dow surged up 371.12 points or 1.4 percent to 26,378.19, the Nasdaq soared 176.33 points or 2.2 percent to 8,039.16 and the S&P 500 spiked 54.11 points or 1.9 percent to 2,938.09.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index slid by 0.7 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has edged down by 0.1 percent, the French CAC 40 Index is down by 0.9 percent and the German DAX Index is down by 1.1 percent.

In commodities trading, crude oil futures are climbing $0.62 to $53.16 a barrel after jumping $1.45 to $52.54 a barrel on Thursday. Meanwhile, after slumping $10.10 to $1,509.50 an ounce in the previous session, gold futures are inching up $0.50 to $1,510 an ounce.

On the currency front, the U.S. dollar is trading at 105.74 yen versus the 106.07 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1203 compared to yesterday's $1.1180.

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