U.S. stock futures were moving sharply lower Wednesday morning after a tumultuous stretch that saw the Dow Jones Industrial Average break a five-session losing streak. The Dow gained 1.2% Tuesday, making back more than a third of Monday's plunge, which was sparked by an escalation in the U.S.-China trade war. China had allowed its currency to slide to more than 10-year lows on Monday, four days after President Donald Trump announced more tariffs on Chinese goods. Overnight, China's central bank set the official midpoint reference for the yuan at 6.9996 per dollar, weaker than Tuesday but stronger than Monday.
Despite Tuesday's bounce in U.S. stocks, investors continue to seek what's perceived as the relative safety of the bond market, with prices soaring and yields plummeting due to their inverse nature. The 10-year Treasury yield on Wednesday dipped below 1.7%, hitting October 2016 lows, as trade war concerns continue to ripple through global financial markets.
Bridgewater Associates' Ray Dalio believes there's a historic opportunity to buy into China as it opens up its markets to foreign investments, saying it's "better to be early than it is to be late." The founder of the world's largest hedge fund also urges investors to bet on "both horses in the race."
Walt Disney, one of the Dow 30 stocks, fell about 4% in premarket trading Wednesday after the entertainment and theme park giant reported a huge 40-cent earnings miss. Fiscal third-quarter adjusted profit of $1.35 per share also fell 28% from a year ago. Disney blamed the integration of the $70 billion in assets acquired from the former 21st Century Fox. Quarterly revenue of $20.25 billion was also short of estimates but 30% higher than last year.
Trump travels to El Paso, Texas, and Dayton, Ohio, on Wednesday to salute first responders to the weekend shooting massacres and spend time with survivors and grieving families.The New York Times reports that so-called red-flag gun legislation, which would help take firearms away from those posing imminent danger, is gaining support among Republicans on Capitol Hill.
— AP and Reuters contributed to this report.