U.S. stock index futures extended declines after China summoned the U.S. ambassador after the arrest of Huawei Technologies Co.’s chief financial officer.
December futures slid as much as 1 percent on the S&P 500 Index as of 8:55 a.m. in Tokyo Monday with 17,093 contracts traded in the first 10 minutes -- usually 1,000 trade in that time. Futures on the Nasdaq 100 Index and Dow Jones Industrial Average declined a maximum of 1 percent and 0.9 percent. The S&P 500 Index sank 4.6 percent last week, the biggest decline since March, as the equity gauge slipped back into negative territory for the year.
“The lack of detail and the heightened rhetoric between China and the U.S. is moving back to a more ‘war-like footing’ regarding trade and relationships,” said James Soutter, the head of global equities at K2 Asset Management Ltd. in Melbourne. “I would expect the war of words to get worse and with that, markets are trading on a wall of fear and cash is the safe haven.”
In addition to fears that Washington’s fragile truce with Beijing was at risk, signs of a slowdown in China’s economy put investors on edge. China’s producer price index climbed in November at the slowest pace in more than two years, while its consumer price index rose slower than estimated.
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