By Ryan Vlastelica

Oracle shares falls in premarket following results

U.S. stock-index futures pointed to a slightly higher open Tuesday, though investors monitored the latest development on the trade-policy front, which has recently shown signs of escalating.

Where are the major benchmarks trading?

Futures for the Dow Jones Industrial Average rose 54 points, or 0.2%, to 26,156. Futures for the S&P 500 were up 3.5 points to 2,899.50, a gain of 0.1%. Nasdaq-100 futures rose 8 points, or 0.1%, to 7,473.

Stocks fell on Monday, in what represented the biggest one-day percentage decline for the S&P 500 since mid-August and the worst session for the Nasdaq since late July. The S&P 500 has risen in five of the past six sessions, while the Dow has advanced in four of the past five sessions, though gains for both have been slight.

What's driving trading?

The threat of a trade war continues to be the primary factor moving stocks on a day-to-day basis. Late Monday, President Donald Trump said he would impose new tariffs (http://www.marketwatch.com/story/trump-to-impose-another-200-billion-in-tariffs-on-chinese-goods-2018-09-17) on about $200 billion in Chinese goods. He also threatened to add hundreds of billions more as part of his campaign to pressure Beijing to change its commercial practices.

Subsequently, White House National Economic Council Director Larry Kudlow said the administration was ready to talk with China about trade when Beijing is "serious." (http://www.marketwatch.com/story/us-ready-for-serious-trade-talks-with-china-says-trump-adviser-kudlow-2018-09-17) Over the weekend, China said it might decline (http://www.marketwatch.com/story/china-may-decline-new-trade-talks-with-us-2018-09-16) to meet for trade talks if the tariffs were implemented.

The developments were the latest sign of growing tensions between the U.S. and its major trading partners, and the tariff announcement spurred the afternoon selloff in stocks. Technology stocks were particularly weakened, as the sector has heavy overseas revenue exposure, and as China is a crucial component to supply chains.

According to analysts at JPMorgan Chase & Co., the threat of a trade war is the biggest risk facing U.S. stocks (http://www.marketwatch.com/story/trade-war-risks-ramp-up-for-stocks-as-companies-start-curtailing-investment-2018-09-13) and could become a major drag on earnings in 2019.

Read:Trade war's 'nuclear option' could be bad for Apple, Amazon: strategist (http://www.marketwatch.com/story/trade-wars-nuclear-option-could-be-bad-for-apple-amazon-strategist-2018-09-18)

Trade issues have been a headline risk for months, and while it has increased day-to-day volatility, the broad indexes have largely ground higher, supported by strong growth in corporate earnings and improving economic data. Based on their Monday closing levels, the S&P is about 1% below record levels, while the Dow is 2% below its own and the Nasdaq, which has a heavier exposure to tech stocks, is 2.9% below its own.

Recent trading has largely been muted, with subdued trading and small intraday moves. The S&P 500 hasn't closed with a 1% swing in either direction in nearly three months, an atypically length of relative calm.

The only economic data point scheduled for release on Tuesday is the September home builder's index, which will be released after the market opens.

In Europe, European Central Bank President Mario Draghi urged eurozone governments to take further action (http://www.marketwatch.com/story/ecbs-draghi-do-more-to-shore-up-banking-sector-2018-09-18) to shore up the region's banking sector, including by creating a common insurance plan for bank deposits.

What are market analysts saying?

"Though this was a move anticipated by many analysts, the [tariff] announcement will nevertheless disappoint investors who were hoping for a thaw in trade tensions," said Mihir Kapadia, chief executive officer of Sun Global Investments. "It remains to be seen how China will retaliate, but despite the muted response of global stock markets this morning, investors might be bracing themselves for further trade conflict fuelled volatility in the markets."

What stocks are in focus?

Shares of Oracle Corp. (ORCL) fell 4.3% in premarket trading a day after the software company reported quarterly revenue that missed expectations (http://www.marketwatch.com/story/oracle-earnings-show-another-cloud-miss-stock-falls-2018-09-17), hurt by weaker-than-expected cloud-services sales.

Visa Inc.(V) and Mastercard Inc.(MA)agreed to settle a class-action lawsuit (http://www.marketwatch.com/story/visa-mastercard-settle-us-retailers-class-action-suit-2018-09-18) brought by U.S. retailers in 2005 for a proposed settlement amount of $6.2 billion. Both stocks were slightly higher in premarket action.

General Mills Inc.(GIS) reported adjusted first-quarter earnings that beat expectations (http://www.marketwatch.com/story/general-mills-tops-profit-estimate-as-sales-fall-slightly-short-2018-09-18), though revenue came in below forecasts.

AutoZone Inc. (AZO) reported adjusted fourth-quarter earnings that beat expectations, though revenue came in below forecasts. Same-store sales also grew less than had been expected (http://www.marketwatch.com/story/autozones-stock-sinks-after-profit-beats-but-sales-miss-2018-09-18). The stock fell 3% in premarket trading.

Red Hat Inc.(RHT) shares fell 4.2% in premarket trading after it was downgraded to neutral by JPMorgan analysts.

The stock of Viking Therapeutics Inc. (VKTX) more than doubled, jumping by as much as 170% after it reported positive results (http://www.marketwatch.com/story/viking-therapeutics-announces-positive-results-in-trial-of-non-alcoholic-fatty-liver-treatment-2018-09-18) in a midstage trial of a treatment for nonalcoholic fatty liver disease.

What are other markets doing?

Asian stocks rallied as investors shrugged off the latest news on tariffs (http://www.marketwatch.com/story/asian-markets-mostly-shrug-off-latest-us-tariffs-targeting-china-2018-09-17). However, the region has struggled lately, and recently traded at four-year lows. Major European indexes were modestly higher.

Crude-oil prices rose sharply, while gold was down 0.1%. The U.S. dollar index was 0.1% higher.

(END) Dow Jones Newswires

September 18, 2018 08:46 ET (12:46 GMT)

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