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US stock futures decline as tech tensions grow

US equity futures dropped along with European stocks as investors digested the latest developments in the Sino-American confrontation over technology. Oil declined while the dollar and Treasuries were steady before the latest Fed minutes.

Contracts on the S&P 500, Nasdaq 100 and Dow Jones Industrial Average fell with Chinese equities after the White House was reported to be considering blacklisting the Asian nation’s video-surveillance firms. Qualcomm tumbled in premarket trading after an unfavorable antitrust ruling, while Target shares climbed after its sales beat estimates.

Banks and carmakers led a decline in the the Stoxx Europe 600 gauge. Core European sovereign bonds edged higher.

Debt and equity markets are struggling for direction as investors try to size up how much damage the trade war will bring to global economic growth and supply chains, while the Trump administration considers adding video equipment to its growing blacklist of sales to China.

With traders in wait-and-see mode, the Cboe volatility index has been retreating and on Tuesday touched its lowest level in almost three weeks.

Next up are the minutes from the most recent Federal Reserve policy meeting. The central bank may have "slightly overdone it" by raising interest rates in December, though it’s premature to talk about a rate cut, St. Louis Fed President James Bullard said in a Bloomberg interview.

"There is a broad expectation for a growth slowdown and the trade tensions are really adding to these kinds of worries," Jingyi Pan, Singapore-based market strategist at IG, told Bloomberg TV. "A lot of this may not have followed through to the economic data."

Elsewhere, Russia’s 10-year bond yields fell to their lowest level since the emerging-market currency crisis last August, after the Finance Ministry said it would consider returning to limited bond auctions. Iron ore futures climbed in Singapore for a sixth consecutive day.

The pound extended a decline and gilts jumped as Prime Minister Theresa May faced pressure to quit within days.

Here are some notable events coming up:

The Fed minutes of its last open market committee policy meeting will be released Wednesday.

Counting of votes from the Indian general elections takes place Thursday as Prime Minister Narendra Modi attempts to secure a second term. The European Parliament holds continent-wide elections May 23 to 26. On Thursday, the ECB publishes its account of the April monetary policy decision.

And these are the main moves in markets:

Stocks

Futures on the S&P 500 Index fell 0.4% as of 08:42 New York time. The Stoxx Europe 600 Index dipped 0.5%. The Shanghai Composite Index decreased 0.5%. The MSCI Emerging Market Index gained 0.2%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%. The euro climbed 0.1% to $1.1177, the strongest in a week. The British pound dipped 0.3% to $1.2668. The onshore yuan weakened less than 0.05% to 6.905 per dollar.

Bonds

The yield on 10-year Treasuries fell two basis points to 2.40%. The yield on two-year Treasuries dipped three basis points to 2.22%. Germany’s 10-year yield declined two basis points to -0.08%. Japan’s 10-year yield sank one basis point to -0.056%.

Commodities

West Texas Intermediate crude sank 1.4% to $62.24 a barrel, the lowest in more than a week. Iron ore climbed 1.9% to $98.00 per metric ton on its sixth consecutive advance. Sugar gained 0.7% to $0.1189 a pound.

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