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Wall Street Set For Lower Open As Sino-US Tensions Simmer

stockmarkets jan18 22may20 lt

U.S. stocks are set to open lower on Friday amid escalating tensions between the United States and China.

On the first day of China's biggest political event of the year, China confirmed that it would effectively bypass Hong Kong's legislature to implement national security laws, which have long been resisted by residents.

The announcement comes as the National People's Congress, China's top legislature, abandoned its decades-long practice of setting an annual target for economic growth, citing uncertainty unleashed by the coronavirus pandemic.

With bilateral ties in a downward spiral since Covid-19 outbreak, China's move to impose a national-security law in Hong Kong could trigger yet another round of tit-for-tat escalation between the world's two largest economies.

Markets elsewhere across Asia and Europe fell today as Hong Kong's political unrest returned as a flashpoint in fast-deteriorating U.S.-China relations.

Treasuries climbed with the dollar, while oil prices fell sharply to snap a six-day winning streak.

The British pound weakened for a third day after the release of weak retail sales data and amid speculation that the U.K. could be the next major nation with negative interest rates.

Closer home, a lack of major U.S. economic data may lead to a choppy trading session as some traders look to get a head start on the long Memorial Day weekend.

In corporate news, chip-maker Nvidia (NVDA) beat expectations with a 39 percent rise in revenue for the first quarter. The company's profit and guidance for the current quarter also topped estimates.

Ross Stores (ROST) swung to a loss in the first quarter on falling revenue, reflecting widespread store closures during the coronavirus pandemic.

Alibaba (BABA) reported better-than-expected quarterly revenue and profit as the Covid-19 lockdowns resulted in a surge in demand for online orders.

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