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* Futures up: Dow 0.16%, S&P 0.26%, Nasdaq 0.26%
By Amy Caren Daniel
May 30 (Reuters) - U.S. stock index futures edged higher on Thursday, taking a breather from a trade tension-driven selloff that has knocked more than 5% off the value of major stock markets since the start of May.
Wall Street’s main indexes fell more than 1% during the session on Wednesday after Chinese state media implied Beijing could restrict rare earth sales to the United States, triggering fears of a drawn-out dispute that could weigh on global growth.
Despite a fractional tick up on Thursday, U.S. treasury yields were still at 20-month lows as investors sought safety in government bonds.
The yield curve between three-month bills and 10-year notes also remained inverted and money markets were now pricing in roughly two U.S. rate cuts by the start of next year.
“We oppose a trade war but are not afraid of a trade war,” Chinese Vice Foreign Minister Zhang Hanhui said on Thursday in Beijing. President Donald Trump and his Chinese counterpart Xi Jinping will meet in late-June at the G20 summit in Japan.
Big technology names were trading higher before the bell. IPhone maker Apple Inc and Microsoft as well as chipmakers Intel Corp and Nvidia Corp were trading about 0.5% higher.
The ramp up in trade tensions have hit technology and energy stocks the hardest among the S&P sectors so far this month.
The three major U.S. indexes have suffered their fourth decline in five sessions. The benchmark S&P 500 index is down 5.5% from its April 30 closing high.
At 6:54 a.m. ET, Dow e-minis were up 40 points, or 0.16%. S&P 500 e-minis were up 7.25 points, or 0.26% and Nasdaq 100 e-minis were up 18.75 points, or 0.26%.
Among stocks, Citigroup Inc rose 1.4% after Goldman Sachs raised the bank’s shares to “buy”, as it expects the lender to achieve a higher return on equity in 2020.
Comcast Corp gained 1.9% after Guggenheim upgraded the cable services provider’s stock to “buy”, saying the company was well positioned in a rapidly changing landscape.
On the macro front, the Commerce Department releases data on gross domestic product for the first quarter at 8:30 a.m. ET. The country’s economic growth is expected to have expanded at a 3.1% annualized rate in the quarter, compared with previous expectations of 3.2%.
Another report is expected to show core personal consumption expenditures (PCE) price index held steady at 1.3% during the first quarter. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva)