U.S. Stocks May See Further Downside Ahead Of Trump's Press Conference

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Following the downturn seen late in the previous session, stocks may see continued weakness 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 158 points.

The downward momentum on Wall Street comes as traders express concerns ahead of President Donald Trump's planned press conference on China.

Traders seem worried that Trump may impose sanctions on China after Beijing approved a controversial security law on Hong Kong that could dramatically erode the special administrative region's autonomy.

Trump has also repeatedly blamed China for the coronavirus pandemic, leading to rising tensions between the two economic superpowers.

In U.S. economic news, the Commerce Department released a report unexpectedly showing a substantial increase in U.S. personal income in the month of April, reflecting the distribution of stimulus checks by the federal government.

The Commerce Department said personal income spiked by 10.5 percent in April after tumbling by a revised 2.2 percent in March.

The jump in personal income came as a surprise to economists, who had expected income to plunge by 6.5 percent compared to the 2.0 percent slump originally reported for the previous month.

Meanwhile, the report showed a steep drop in personal spending, reflecting the impact of the coronavirus-induced lockdown.

The Commerce Department said personal spending plummeted by 13.6 percent in April after a revised 6.9 percent slump in March.

Economists had expected spending to tumble by 12.6 percent compared to the 7.5 percent nosedive originally reported for the previous month.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of May.

The Chicago business barometer is expected to rise to 40.0 in May from 35.4 in April, although a reading below 50 would still indicate a contraction in activity.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of May. Economists expect the consumer sentiment index to be upwardly revised to 74.0 from the preliminary reading of 73.7.

At 11 am ET, Federal Reserve Chair Jerome Powell is scheduled to speak in a webcast discussion with former Federal Reserve Board Vice Chairman Alan Blinder.

After seeing strength for much of the session, stocks came under pressure in the final hour of trading on Thursday. The major averages pulled back off their highs of the day and into negative territory.

The major averages climbed off their lows going into the close but still ended the day in the red. The Dow fell 147.63 points or 0.6 percent to 25,400.64, the Nasdaq slid 43.37 points or 0.5 percent to 9,368.99 and the S&P 500 dipped 6.40 points or 0.2 percent to 3,029.73.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index edged down by 0.2 percent, while China's Shanghai Composite Index inched up by 0.2 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has fallen by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both down by 0.9 percent.

In commodities trading, crude oil futures are sliding $0.74 to $32.97 a barrel after climbing $0.90 to $33.71 a barrel on Thursday. Meanwhile, after rising $1.50 to $1,728.30 an ounce in the previous session, gold futures are jumping $18 to $1,746.30 an ounce.

On the currency front, the U.S. dollar is trading at 107.17 yen versus the 107.65 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1135 compared to yesterday's $1.1077.

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