By Shreyashi Sanyal
(Reuters) - U.S. stock index futures pointed to a lower opening on Tuesday, following European and Asian weakness, after the International Monetary Fund cut its global growth forecasts, squarely blaming the Sino-U.S. trade war.
The IMF lowered its global economic growth forecasts for 2018 and 2019, and its 2019 estimates for the United States and China, saying the two countries would feel most of the impact of their trade war next year.
"IMF's downgrade just goes to show how the tariff dispute between U.S. and China is beginning to take its toll on the global economy," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Besides the fear of slowing global growth, Wall Street has come under recent pressure after Treasury yields hit multi-year highs as strong data fueled fears about rising inflation and potentially faster interest rate hikes.
The benchmark U.S. 10-year Treasury yield climbed to its highest since May 2011 on Tuesday.
Despite the recent pullback, U.S. stocks are near record highs and that has raised concerns over valuations, especially of high-growth stocks, such as technology and the FAANG group.
"A catalyst like earnings will give investors something to look forward to but right now it's just a continuation of negative news for equities, with higher yields and slowing global growth," Cardillo said.
Shares of the so-called FAANGs - Facebook, Amazon, Apple, Netflix and Alphabet - were down between 0.52 percent and 1.44 percent in trading before the bell.
Google-parent Alphabet was on track for its second day of losses after the company said it would shut down its social network Google+ and tighten its data sharing policies after announcing on Monday that private profile data of at least 500,000 users may have been exposed to hundreds of external developers.
Facebook dipped 0.3 percent and Twitter dropped 0.4 percent, while Snap fell 2.4 percent after MoffettNathanson said the Snapchat-owner has been facing a significant cash drain.
At 8:39 a.m. ET, Dow e-minis were down 121 points, or 0.46 percent. S&P 500 e-minis were down 13.75 points, or 0.48 percent and Nasdaq 100 e-minis were down 30.75 points, or 0.42 percent.
Perrigo dropped 2.6 percent after the drugmaker replaced Chief Executive Officer Uwe Roehrhoff, who took the helm less than a year ago, with the former head of Lorillard Tobacco, Murray Kessler.
Kroger fell 2.6 percent after Deutsche Bank said the grocer would face higher costs in its e-commerce expansion and space optimization strategy.
PPG Industries tumbled 10.1 percent after the specialty chemical maker said its current-quarter profit would be hit by higher raw material costs.
PPG shares dropped the most among S&P 500 components trading premarket, followed by shares of peer Sherwin-Williams which fell nearly 4 percent.
Papa John's rose 8.3 percent after the Wall Street Journal reported Nelson Peltz's Trian Fund Management was evaluating a takeover bid for the pizza chain.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)
Disclaimer: No Business Standard Journalist was involved in creation of this content
