×

US STOCKS-Futures lower as Trump sets stage for trade war

* Futures slide: Dow 207 pts, S&P 500 14 pts, Nasdaq 58 points

March 2 (Reuters) - U.S. stock futures pointed to a fourth straight daily fall on Friday, as investors fretted President Donald Trump had launched a global trade war with his promise to impose import tariffs on steel and aluminum.

Europe promised to act firmly and China said it would defend its interests appropriately if Trump followed through with his pledge to place a 25 percent tax on steel and 10 percent on aluminum next week.

Trump's announcement drove a third straight 1 percent decline for the Dow and S&P 500 on Thursday, putting the Dow into negative territory for the year, and futures pointed to almost a 1 percent fall at opening.

"The announcement has also come at a time when investor sentiment is already fragile," Oanda Senior Market Analyst Craig Erlam said in a note.

"For someone so obsessed with stock market performance, he's taking a big gamble with these tariff's, the benefits of which are questionable."

World stocks tracked the Wall Street selloff into the close and tumbled on Friday, with investors flocking towards traditional safe havens including government bonds, Japan's yen and gold. Spot gold prices rose 0.50 percent to $1,322.76 per ounce.

By 7:05 a.m. ET, Dow e-minis down 207 points, S&P 500 e-minis down 14 points and Nasdaq 100 e-minis down 58 points.

Wall Street fell for the first time in 11 months in February, hit by worries that rising interest rates and bond yields would cool the economy and finally begin to draw money out of equities after an almost decade-long rally.

Federal Reserve Chairman Jerome Powell cooled speculation that the U.S. central bank was set to accelerate with monetary tightening on Thursday by saying there were no signs the world's largest economy was overheating.

But New York-Fed chief William Dudley sent another shock through markets later in the day by saying that he regarded four rate hikes this year as in line with the "gradual" definition the Fed has been giving to markets.

Until this week, interest rate futures were pricing in only three hikes.

On a thin day for data, the University Of Michigan consumer sentiment index is expected at 10 a.m. ET.

The day's biggest earnings release is J.C. Penney Co Inc , expected to report a rise in fourth-quarter same-store sales after a strong holiday season.

Among stocks, Smith & Wesson maker American Outdoor slumped 14 percent after giving a weak forecast for its fourth quarter starting in February.

Gap Inc soared 9 percent in premarket trading after the clothing retailer topped fourth quarter estimates. (Reporting by Ankur Banerjee in Bengaluru; Editing by Anil D'Silva)