US open: Mixed open on the Street as investors mull over Trump's latest legal woes

Wall Street trading began with a mixed open on Thursday, albeit with the major indices sitting near record highs, as investors mulled over escalating trade tensions between the US and China and Donald Trump's latest legal woes.

At 1535 BST, the Dow Jones was down 0.02% to 25,729.08. However, the S&P was 0.15% firmer at 2,865.98 and the Nasdaq was trading 0.42% stronger at 7,922.04.

Discussing the Dow's early performance, SpreadEx's Connor Campbell said, "The US index slipped just shy of 20 points after the bell, a decline that allowed the Dow to keep the right side of 25,700."

"It has taken the latest trade war twist – not to mention Trump's Cohen/Manafort headache – in its stride, though those concerns have perhaps reduced investors' appetite to send the Dow much higher," Campbell added.

Trade tensions were still very much in focus as the US and China implemented 25% tariffs on $16bn-worth of each other's goods, with talks between the two in Washington set to continue.

Investors were also digesting the latest FOMC minutes released on Wednesday, which suggested that the Fed is likely to hike interest rates again next month and possibly in December too.

Meanwhile, Trump was making the headlines yet again after he said in an interview with Fox & Friends that payments to two women alleging to have had affairs with him were not a campaign violation as they came from him personally, not the campaign. The comments came after his former lawyer, Michael Cohen, pleaded guilty to eight charges including campaign finance violations on Tuesday. Cohen said the payments had been made at the direction of Trump to influence the election.

Market participants were also looking ahead to Fed chairman Jerome Powell's speech at the Jackson Hole symposium on Friday.

Hussein Sayed, chief market strategist at FXTM, said: "Although Powell will not provide a definite answer on whether the Fed will hike rates two more times this year, he might still provide some signals to investors. If Powell believes that current trade tensions between the US, China and the rest of the world will possibly start impacting economic growth, this suggests the Fed may begin considering slowing down the tightening pace.

In corporate news, retailer Children's Place dropped 2.08% at the open despite its second-quarter adjusted earnings beating estimates.

Elsewhere, Hormel Foods dipped 2.14% in early trade as its third-quarter sales missed expectations and the company downgraded its outlook.

Still to come, results from Gap, VMware, HP and Intuit.

On the data front, initial jobless claims drifted lower last week, signalling a still robust pace of hiring in the economy.

Initial unemployment claims for the week ending on 18 August slipped by 2,000 to 210,000, whereas economists at Barclays had anticipated a rise of 3,000 to 215,000.

Meanwhile, Markit's manufacturing PMI fell to a nine-month low of 54.5, falling short of an expected reading of 55.

Mirroring trends seen across the services sector, the latest data pointed to slower rates of output and new business growth at manufacturing companies due to stretched supply chains, import tariffs on metals, and a rise in demand for domestically sourced items.

Sales of new homes in the US slumped by 1.7% month-on-month during July, for a second straight monthly decline as the housing market began to look like it may have lost some of its steam.

Newly built homes sold at a seasonally adjusted annual rate of 627,000 last month, down from the 638,000 seen in June and 654,000 in May, according to the Commerce Department.

It was separately reported that the rate of house price inflation in the US had eased slightly last month.

In seasonally adjusted terms, the Federal Housing Finance Administration's Purchase-Only index edged up by 0.2% month-on-month in July.

But the year-on-year rate of price increases slipped from 6.7% in June to 6.5%.