Dow Jones & Nasdaq 100: China Trade Slump Hits US Futures in Asia

US stock futures came under selling pressure in the Asian session on Friday, November 7. US-China Trade developments and key Chinese economic indicators weighed on sentiment.

Friday’s headlines and key data came as markets awaited a US Supreme Court ruling on the legality of President Trump’s tariffs and potentially the US Jobs Report. Speculation has intensified that the US Supreme Court could rule Trump’s tariffs illegal. A withdrawal of tariffs would lower costs on imported goods.

Lower import costs may ease inflationary pressures and raise bets on a December Fed rate cut. A more dovish Fed policy stance could boost demand for capital-intensive stocks. Furthermore, lower tariffs could improve earnings for firms reliant on imported components or materials.

While the Supreme Court ruling and upcoming US labor market data will be key, Chinese trade data influenced the futures market in the Asian session.

Chinese Exports Plunge, Signaling a Demand Slump

Chinese exports declined 1.1% year-on-year in October, down sharply from September’s 8.3% surge, while imports rose just 1.0% (September: 7.4%).

The unexpected fall in exports weighed on sentiment, sending the Hang Seng Index down 1.14% and US index futures lower. The Nasdaq 100 E-mini Futures dropped from 25,269 to 25,203 after the release of Chinese trade data before steadying.

October’s trade data release coincided with reports of the US planning to ban Nvidia’s scaled-down AI chip sales to China. The Kobeissi Letter commented:

“This explains Jensen Huang’s comments on China yesterday.”

Nvidia CEO Huang reportedly stated:

“China is going to win the AI race.”

Notably, a ban could escalate US-China trade tensions less than 10 days after President Trump and President Xi reached a trade agreement.

US Stock Futures: US Jobs Report and Supreme Court Ruling in Focus

US stock futures extended their losses from Thursday during Friday’s Asian trading session. The Nasdaq 100 E-mini fell 17 points, the Dow Jones E-mini slipped 2 points, while the S&P 500 E-mini dropped 3 points.

Later on Friday, a US Senate vote on a stopgap funding bill, US labor market data, and Fed speakers will influence market sentiment.

Softer wage growth, rising unemployment, and falling nonfarm payrolls may fuel stagflation fears, potentially weighing on US stock futures. Labor market data from Thursday, November 6, indicated a sharp increase in job cuts, suggesting a weak jobs report.

The Kobeissi Letter highlighted rising stagflation risks following the release of US services sector PMI data, stating:

“The services sector continues to deal with surging prices and a weak labor market. Stagflation pressures are building.”

While the labor market data could test buyer demand for risk assets, the Supreme Court ruling and Fed speakers will also move the dial.

Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500

Despite this week’s losses, US stock futures traded above key technical levels, signaling a moderately bullish bias.

Near-term trends will hinge on the Senate vote, the US Jobs Report, Fed commentary, and a Supreme Court ruling. Key levels traders should monitor include:

Dow Jones

• Resistance: 47,250, 47,500, and the October 28 record high of 48,214.
• Support: 47,000 and the 50-day EMA (46,550).

Nasdaq 100

• Resistance: 25,500, 26,000, then October 30 record high of 26,399.
• Support: 25,000, then 50-day EMA (24,907).

S&P 500

• Resistance: October 30 record high of 6,954, then 7,000.
• Support: the 50-day EMA (6,698) and 6,500.

Market Outlook: US Data and Capitol Hill

Traders brace for heightened volatility, with the US Supreme Court and US labor market data in focus.

Developments in the US Senate will also need monitoring after the US government shutdown extended to 37 days on Thursday, November 6. The record shutdown could impact the US economy further amid rising stagflation risks, potentially weighing on US stock futures.

Traders should also monitor Fed speeches. Growing support for aggressive rate cuts may counter concerns about stagflation.

Given the current market forces, US stock futures remain exposed to further losses ahead of the US session.

Follow our live coverage and consult the economic calendar for real-time market updates.