USA500 futures dropped lower on Wednesday following yesterday’s bounce back as the markets decided the poor news on China and the US trade war had been priced in. Investors looked ahead to a fresh batch of earnings and U.S. economic data later in the trading day while keeping their eyes on any trade developments. Yesterday U.S. President Donald Trump denied that talks between the two sides had broken down. "We have a dialogue going. It will always continue," said Trump, who has already announced plans to meet Chinese President Xi Jinping at a G20 summit late next month. Speculation that the Federal Reserve may cut interest rates to offset any weakness in the economy took a knock on Tuesday after New York Fed head John Williams and Kansas City Fed President Esther George both pointed downplayed the suggestion, Williams in particular noting that the tariff increases levied by the U.S. would tend to increase inflation.
Investors are looking ahead to April retail sales numbers at (13:30 GMT+1), which are expected to show a slight increase.