REUTERS: U.S. stocks were set to open lower on Monday as weak data from China brought back fears of a slowdown in the world's second-biggest economy, while investors looked for any positive news on trade talks ahead of a tariff deadline later in the week.
China's exports in November shrank for the fourth consecutive month, underscoring persistent pressures on manufacturers from the Sino-U.S. war, but growth in imports may be a sign that Beijing's stimulus steps are helping to stoke demand.
"Obviously, we can see the Chinese economy is really suffering but this could push them to come up with some sort of a goodwill gesture before the tariffs set in," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Wall Street gained ground on Friday, driven by a blowout domestic jobs report and optimism around U.S.-China trade negotiations. All three major U.S. stock indexes are hovering within 1per cent of record highs set two weeks ago.
In a quiet start to the week, market participants are expected to keep a close watch on trade as planned U.S. tariffs on Chinese imports kick in on Dec. 15 that will cover several consumer products, including mobile phones and toys.
Analysts noted that the sideways move on Monday was indicative of investors hoping for a delay in the deadline and expectations of more positive gestures from both sides.
"The markets are telling us that there are hopes for something positive to come up before the deadline. The two sides might just roll back tariffs or even postpone the date but something will happen," Cardillo said.
Also in focus is the Federal Open Market Committee's two-day policy meeting, which starts on Tuesday.
At 8:36 a.m. ET, Dow e-minis were down 20 points, or 0.07per cent. S&P 500 e-minis were down 2.5 points, or 0.08per cent, and Nasdaq 100 e-minis were down 10.75 points, or 0.13per cent.
Among stocks, 3M Co dropped 1per cent in premarket trading after Citigroup cut its rating on the industrial conglomerate's shares to "neutral".
Macy's Inc fell 2.2per cent after Goldman Sachs reportedly downgraded shares of the department store operator to "sell".
In deals, Merck & CO said it would buy cancer drug developer ArQule Inc for US$2.7 billion in cash to beef up its portfolio of blood cancer treatments. Shares of ArQule doubled in value following the news.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernard Orr)