US pre-open: Stocks to slip amid trade war worries as earnings roll in

US stocks looked set to drop at the open on Thursday amid fresh concerns about Sino-US relations, as investors braced for more earnings releases.

At 1215 GMT, Dow Jones Industrial Average and S&P 500 futures were down 0.3%, while Nasdaq futures were 0.4% weaker.

James Hughes, chief market analyst at Axi Trader, said: "Upbeat earnings news may have helped lift Wall Street during the early part of yesterday’s session but profit taking started before the close and has continued overnight, judging by the state of index futures. They are tracking losses we’ve seen building in Asia through the session and the Dow is now forecast to open lower than it started on Wednesday morning, too.

"The March 1 deadline for a trade deal with China moves ever closer, whilst the ongoing shutdown of the government will take an increasingly significant bite out of the economy as this drags on, too."

The government shutdown is now entering its 27th day, with no end in sight as President Trump and the Democrats remain at odds over funding for his Mexico border wall.

Meanwhile, escalating tensions between the US and China were likely to dent investor sentiment following reports that the US is investigating Chinese tech giant Huawei for stealing trade secrets from US business partners.

"It goes right to the heart of the unresolved IP issues with China. China is unlikely to shrug this off which is creating a risk-off environment," said London Capital Group analyst Jasper Lawler, adding that signs of retaliation from China could see stocks sink further.

On the corporate front, earnings are due from Morgan Stanley, American Express and Netflix.

Elsewhere, Signet Jewelers looked poised for losses at the open after it downgraded its guidance on the back of worse-than-expected holiday sales.

On the macroeconomic calendar, initial jobless claims and the Philadelphia Fed manufacturing index are at 1330 GMT.