July 6, 2018 / 11:16 AM / 3 months ago

US STOCKS-Futures dip as U.S.-China tariff war begins; jobs data awaited

* Futures down: Dow 0.33 pct, S&P 0.16 pct, Nasdaq 0.22 pct

By Sruthi Shankar

July 6 (Reuters) - U.S. stock index futures dipped on Friday after the United States and China slapped tariffs on each other’s exports worth $34 billion, triggering what Beijing called the “largest-scale trade war.”

The U.S. tariffs took effect at 0401 GMT on Friday and shortly after that China’s commerce ministry said it was forced to retaliate.

While U.S. goods to China including autos and agricultural products would face 25 percent tariffs, Washington imposed duties on Chinese products such as motor vehicles, computer disk drives, parts of pumps, valves and printers.

The reaction was largely subdued in U.S. futures, but New York-listed shares of Chinese companies fell. iQIYI dropped 1.9 percent, Huya 1.1 percent and JD.com 0.49 percent in premarket trading.

At 6:40 a.m. ET, Dow e-minis were down 80 points, or 0.33 percent. S&P 500 e-minis were down 4.5 points, or 0.16 percent and Nasdaq 100 e-minis were down 15.5 points, or 0.22 percent.

Meanwhile, investors awaited the U.S. jobs data for June, when employers likely maintained a brisk pace of hiring while increasing wages for workers.

The Labor Department report, due at 8:30 a.m. ET, is expected to show nonfarm payrolls increased by 195,000 jobs last month, while average hourly earnings are expected to rise 0.3 percent.

Just before the tariff deadline, President Donald Trump upped the ante, warning that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount of U.S. imports from China last year.

While the initial volley of tariffs was not expected to have a major economic impact, the fear is that a prolonged battle would disrupt makers and importers of affected goods in a blow to global trade, investment and growth.

Minutes of the Federal Reserve’s June 12-13 policy meeting published on Thursday offered an upbeat assessment of the labor market.

It also showed that the U.S. central bankers discussed whether recession lurked around the corner and expressed concerns global trade tensions could hit an economy that by most measures looked strong.

Among other stocks, Biogen rose 12.5 percent after Japanese drugmaker Eisai Co and the company said the final analysis of a mid-stage trial of their Alzheimer’s drug showed positive results. (Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

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