S&P 500 Futures bear the burden of fresh trade war risk

• S&P 500 Futures heavies as odds favoring US-China trade war regain traction.
• Fears of virus resurgence add to the risk aversion.
• China data, trade/virus updates will be the key to follow.

With US President Donald Trump’s hard stand against China weighing on the market’s risk-on sentiment, S&P 500 Futures drop 0.25% to 2,915 during the early Asian session on Tuesday.

The risk barometer recently took clues from US President Trump’s refrain to reopen the Phase 1 terms of the US-China trade deal for renegotiation. The Republican leader has earlier alleged the dragon nation for the global outbreak of the coronavirus (COVID-19) which China has harshly turned down.

It’s worth mentioning that the US and Chinese diplomats agreed for communication and coordination during their call on Friday.

Elsewhere, a fresh rise in virus figures from the epicenter Wuhan and Germany suggests the recent re-opening of the economies should be taken with a pinch of salt before thinking of them as risk positive.

Further, talks surrounding the negative Fed rate and the tussle between Germany and Europe seem also to have contributed towards the risk-off sentiment.

As a result, the US 10-year Treasury yields part ways from the previous day’s recovery while declining 1.3 basis points (bps) to 0.713% by the press time.

Also read: S&P 500: Next 3 months will bring a near 20% decline to 2,400 – Goldman Sachs

Traders may now keep eyes on the Chinese inflation figures for April as immediate catalysts while updates concerning the US-China relations and virus can keep offering the background music.