US pre-open: Stocks set for weaker start after soft China data

Wall Street looked set for a weaker open on Tuesday as oil prices retreated and soft Chinese data weighed on sentiment.

At 1215 GMT, Dow Jones Industrial Average and S&P 500 futures were both down 0.4% while Nasdaq futures were 0.5% lower.

“US markets look set to follow in Europe’s footsteps this morning with a lower open, despite eking out gains in yesterday’s session, as commodity prices slip back in reaction to this morning’s Chinese economic data,” said CMC Markets’ Michael Hewson.

Data from China showed exports and imports fell more than forecast in February. Exports fell 25.4% from the previous year to $126.1bn, compared with January’s 11.2% contraction. Imports, meanwhile, were down 13.8% to $93.5bn, compared with an 18.8% drop the previous month.

The data weighed on European shares, with basic resources – which are highly dependent on demand from China – pacing the decline.

Oil prices were also on the back foot after Kuwait said it would only agree to freeze output if all major producers take part.

West Texas Intermediate was down 0.8% to $37.58 a barrel and Brent crude slipped 0.5% to $40.63.

As commodities came under pressure, Goldman Sachs said the recent surge in commodity prices was not sustainable and the rout was not over.

“In the current supply-driven market, demand hasn’t really changed, it takes lower prices to push and keep supply below demand to create a deficit. As a result, higher prices are much harder to sustain in a supply-driven market since supply is primed to return with higher prices,” the bank said.

In corporate news, Shake Shack shares tumbled in pre-market trade after the burger chain reiterated its expectations of slower sales growth this year.

On the upside, though, retailer Urban Outfitters surged after its fourth quarter results beat analysts’ expectations.

In currencies, the dollar was 0.3% higher versus the pound, 0.2% lower against the yen and flat versus the euro.