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U.S. Stocks May Give Back Ground Amid Uncertainty About Trade Talks

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Stocks are likely to move to the downside in early trading on Monday, giving back ground following the rally seen last Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 52 points.

Lingering concerns about the ongoing U.S.-China trade war may weigh on the markets ahead of the next round of high-level trade talks in Washington later this week.

Ahead of the talks, scheduled to begin on Thursday, a report from Bloomberg News said Chinese officials are signaling they're increasingly reluctant to agree to the broad trade deal being pursued by President Donald Trump.

Citing people familiar with the discussions, Bloomberg said senior Chinese officials have indicated the range of topics they're willing to discuss has narrowed considerably.

An offer from Chinese Vice Premier Liu He would purportedly not include reforming Chinese industrial policy or government subsidies.

The upcoming negotiations come as the trade war continues to hang over the economy, with a survey by the National Association for Business Economics showing 53 percent of economists see trade policy as the key downside risk to the economy.

The NABE said four out of five panelists believe that risks to the economic outlook are weighted to the downside, an increase from the 60 percent who held this view in June.

"The panel turned decidedly more pessimistic about the outlook over the summer, with 80% of participants viewing risks to the outlook as tilted to the downside," said Survey Chair Gregory Daco, chief U.S. economist at Oxford Economics.

He added, "The rise in protectionism, pervasive trade policy uncertainty, and slower global growth are considered key downside risks to U.S. economic activity."

Late in the trading day, the Federal Reserve is scheduled to release its report on consumer credit in the month of August. Consumer credit is expected to climb by $15.5 billion in August after jumping by $23.3 billion in July.

Following the significant rebound seen over the course of the trading day last Thursday, stocks showed another substantial move to the upside during trading last Friday. With the rally, the major averages further offset the steep losses posted last Tuesday and Wednesday.

The major averages finished the session just off their best levels of the day. The Dow soared 372.68 points or 1.4 percent to 26,573.72, the Nasdaq surged up 110.21 points or 1.4 percent to 7,982.47 and the S&P 500 spiked 41.38 points or 1.4 percent to 2,952.01.

For the week, the major averages turned in a mixed performance. While the Nasdaq rose by 0.5 percent, the S&P 500 fell by 0.3 percent and the Dow slid by 0.9 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with markets in China closed for a holiday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Australia's S&P/ASX 200 Index climbed by 0.7 percent.

Meanwhile, the major European markets have all moved to the upside on the day. The U.K.'s FTSE 100 Index, the French CAC 40 Index and the German DAX Index have all risen by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.76 to $53.57 a barrel after rising $0.36 to $52.81 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,504.40, down $8.50 from the previous session's close of $1,512.90. On Friday, gold edged down $0.90.

On the currency front, the U.S. dollar is trading at 106.88 yen compared to the 106.94 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.0992 compared to last Friday's $1.0979.

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