Stock futures fall slightly as Wall Street wraps up wild week, U.S.-China tensions rise

U.S. stock futures fell early Friday amid rising tensions between China and the U.S. as traders wrapped up a wild week of trading. 

Dow Jones Industrial Average futures slid 68 points, or 0.3%. S&P 500 and Nasdaq 100 futures traded lower by 0.3% and 0.4%, respectively. 

Overnight, China released draft legislation over new national security measures on Hong Kong after last year’s burst of anti-government protests in the city. That law is expected to increase Beijing’s hold over Hong Kong. China also opted against setting a GDP target for 2020 as the coronavirus batters the second-largest economy in the world. 

That proposal was unveiled after the Senate passed a bill earlier in the week that would potentially delist Chinese stocks from U.S. exchanges.

Ed Mills, Washington policy analyst at Raymond James, said the bill is moving at “warp speed,” noting: “We believe there will be a significant push for the legislation to be taken up in the coming weeks, and we believe it is only a matter of time before this bill (or something similar) is signed into law.”

Still, the major averages remained on pace for solid weekly gains. The Dow was up more than 3% week to date.  The 30-stock Dow was headed for its biggest one-week gain since the week of April 9. The S&P 500 has gained 2.96% this week while the Nasdaq Composite is up 3% in that time.

Those weekly advances come amid optimism around the global economy reopening as well as rising hopes for a coronavirus vaccine.

“The future remains uncertain, and thus, we are not confident in saying a second wave cannot happen — but the good news, there has yet to be a second wave in re-opened economies,” said Tom Lee, founder and head of research at Fundstrat Global Advisors, in a note. “We remain in the half-full camp and believe stocks offer pretty good risk/reward, even here.”

The S&P 500 has skyrocketed more than 34% since hitting an intraday low on March 23, led in part by strong gains from major tech stocks.

To be sure, a CNBC analysis using data from Johns Hopkins University shows that as U.S. states reopen, more than a third have seen new coronavirus cases rise.

President Donald Trump also said Thursday night “we are not closing our country” if a second wave of coronavirus infections hits the U.S. “We can put out the fires. Whether it is an ember or a flame, we are going to put it out. But we are not closing our country.”

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