By Shreyashi Sanyal
(Reuters) - U.S. stock index futures pointed to a lower opening for Wall Street on Tuesday, as investors turned skeptical of the chances of a breakthrough in the U.S.-China trade talks, while a flattening U.S. yield curve raised fears of a slowing domestic economy.
Wall Street rallied on Monday on news that U.S. President Donald Trump and Chinese President Xi Jinping had agreed to hold off on new tariffs for 90 days, offering relief to a market that has been clouded for much of the year by the prospect of an all-out trade war.
However, different dates from the White House regarding start of the three-month trade ceasefire and skepticism over an actual resolution in the agreed negotiating window dampened the mood.
Traders were questioning the recent trade agreement as "it isn't very clear on what both sides agreed to, other than just a temporary truce," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida said.
The short end of the U.S. yield curve also inverted for the first time since 2007, and the yield curve between the benchmark 2-year and 10-year notes remained at the flattest in over a decade. [US/]
Investors typically demand higher yields to commit money for longer periods of time. When short-term yields move higher it can imply doubts about the immediate future, and an inversion of the yield curve has preceded past recessions.
At 8:37 a.m. ET, the Dow and Nasdaq futures were down about 0.4 percent each.
Apple Inc dropped 2 percent in premarket trading, after leading the rally on Monday. One of the company's suppliers Cirrus Logic Inc trimmed its revenue outlook, adding to growing evidence that the latest iPhones are not selling well.
Dollar General Corp fell 5.4 percent after lowering its full-year profit and sales forecast, hit by higher costs related to hurricanes.
Among the few bright spots were energy companies whose shares rose as crude prices increased more than 2 percent, extending gains ahead of expected output cuts by OPEC and a mandated reduction in Canadian supply. [O/R]
(Reporting by Shreyashi Sanyal in Bengaluru; Additional reporting by Sruthi Shankar; Editing by Shounak Dasgupta)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)