Stock futures steady amid U.S. protests, simmering China tensions

(Reuters) – Futures tracking the S&P 500 index were trading flat on Monday following a strong showing in May, as investors turned cautious after protests erupted across the country over race, and simmering tensions between Washington and Beijing heated up.

National Guard troops were deployed in 15 states and Washington, D.C. on Sunday in an attempt to quell a sixth night of violence that began with peaceful protests over the death of a black man, George Floyd, in police custody.

Target Corp (TGT.N) and Walmart Inc (WMT.N) closed stores, while Amazon.com Inc (AMZN.O) scaled back deliveries during the unrest that included looting in many cities. Target and Walmart shares fell 2% and 0.9%, respectively, in premarket trading.

Further denting sentiment, Beijing said U.S. attempts to harm Chinese interests will be met with firm countermeasures, criticizing a Washington decision to begin ending special treatment for Hong Kong in response to a new security law.

“The fact that both sides appear to be shying away from any real direct action is probably a fairly positive development,” said Chris Beauchamp, chief market analyst at IG in London.

“This market has been very resilient in terms of its outlook.”

The escalation in Sino-U.S. tensions poses a major threat to the stock market’s rebound since late March that was powered by expectations of a recovery from the coronavirus-led downturn.

Wall Street had rebounded late in Friday’s session, with the S&P 500 logging its biggest two-month percentage gain since 2009, after President Donald Trump’s measures against China did not include a breakdown of the trade deal like many had feared.

At 8:03 a.m. ET, Dow e-minis 1YMcv1 were up 21 points, or 0.08%. S&P 500 e-minis EScv1 were down 0.75 points, or 0.02%, and Nasdaq 100 e-minis NQcv1 were down 24.75 points, or 0.26%.

Coty Inc (COTY.N) rose 8.3% after the cosmetics company appointed Chairman Peter Harf as its new chief executive officer.

Zynga (ZNGA.O) climbed 7.7% after the mobile game maker said it would acquire Istanbul-based gaming company Peak for $1.8 billion.

Pfizer Inc (PFE.N) fell 6.1% after the drugmaker said the late stage trial of its breast cancer drug Ibrance was unlikely to meet the main goal of study.

Two sets of surveys from the U.S. manufacturing sector later in the day will be watched closely.

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