Europe's STOXX 600 and futures on the S&P 500, Dow and NASDAQ 100 took a beating this morning as weekend reports that Alphabet’s Google halted business with Huawei—including transfer of hardware, software and key technical services—finally took hold of the market, crushing tech shares.
U.S. contracts had initially pared losses after last week’s sharp decline, helped by the beneficial price effect of the White House's move to lift metal tariffs on Canadian and Mexican imports.
However, the rebound proved short-lived compared with the ramifications of last week's ban on Chinese telecom company Huawei, as other U.S. tech companies such as Qualcomm and Broadcom joined Alphabet in stopping all shipping from the Chinese smart phone giant.
Elsewhere, crude climbed after Saudi Arabia and other key OPEC producers signaled their intention to keep oil supplies constrained for the rest of the year, while pledging to prevent any risk of shortage.
The euro managed to crawl into the green after edging lower, remaining under pressure ahead of European Parliament elections, which are expected to hand more power to Eurosceptic populist parties. The common currency is hovering only 0.2% above the lowest level since June 2017. Meanwhile, it trades within a descending channel of a pair of parallel trendlines demarking the respective territories of bears and bulls.On the other hand, the yen slipped as economic data showing unexpected growth in Japan came with reasons for caution, masking a drop in imports.
Nathan Lambert, Head of Global FX Analytical Department