Futures on major U.S. stock indices extended their losses on Wednesday after Commerce Department said that US trade deficit widened unexpectedly in June.
Futures on the S&P 500 are down 1.45 percent, futures on the Dow Jones Industrial Average are down 1.24 percent and Nasdaq100 futures are down 1.49 percent.
Earlier this morning, stock futures dipped tracking cues from selloff in global markets as Fed’s cautious outlook on US economy coupled with data from Japan, China and England renewed concerns about the global economic recovery.
US trade deficit in June widened to $49.9 billion from $42 billion in May, the largest gap since October 2008, against analysts’ expectation of $42.5 billion. US trade deficit with China widened to $26.2 billion from $18.4 billion a year ago.
On Tuesday, the Fed said the economic recovery has “slowed in recent months” and is likely to be “more modest in the near term than had been anticipated.” The Fed kept the benchmark interest rates unchanged at a record low between zero percent and 0.25 percent.
Bank of England lowered its forecast for UK economic growth and said inflation is likely to be higher in the near term than its earlier forecast. The bank said that the economic recovery will continue but at a slower pace than expected in May.
Japanese machinery orders inclined less than expected during June by 1.6 percent compared to decline of 9.1 percent in May. Chinese annualized industrial production came at 13.4 percent in July compared to a 13.7 percent a year earlier indicating that Chinese economy is slowing.
European stocks declined on Wednesday, led by declines from mining companies’ shares as investors worried about Chinese growth and the health of US economy. Markets are and currently trading lower with FTSE 100 trading down by 79.08 points, DAX30 is trading down by 106.74 points and CAC 40 trading down by 64.56 points.
The euro declined 1.24 percent to 1.3012 against the dollar and the yen advanced 0.61 percent against the greenback.
Crude oil futures declined 1.28 percent ahead of inventories data and copper futures fell 1.04 percent. In precious metal sector, gold futures advanced 0.67 percent and silver futures fell 0.56 percent.
