US STOCKS-Futures point to steep losses at open as trade tensions worsen

* Futures down: Dow 1.23%, S&P 1.31%, Nasdaq 1.72%

By Sruthi Shankar
May 13 (Reuters) - U.S. stock index futures pointed to sharp
declines at the open on Monday, as a standoff between the United
States and China over their prolonged trade dispute heightened
fears of a retaliatory war that could push the U.S. economy into
recession.
The S&P 500 .SPX logged on Friday its worst weekly
declines since December after Washington raised tariffs on
Chinese good worth $200 billion to 25% from 10% and China vowed
to respond after a high-level talk ended with no agreement.
Over the weekend, tensions took a turn for the worse after
U.S. officials demanded promises of concrete changes to Chinese
law and Beijing said it would not swallow any "bitter fruit"
that harmed its interests. The fears reverberated through the global financial markets,
with the yield curve between three-month U.S. Treasury bills and
10-year notes inverting for the second time in under a week. An
inversion in the yield curve is seen as a classic signal that a
recession is coming. US/ U.S. equities further pulled back from the record highs hit
just two weeks back on hopes of a trade deal and a positive
first-quarter earnings season. The S&P 500 was about 2.2% below
its all-time high close on Friday.
As the trade dispute extends, investors expect tariffs to
increase corporate costs, lower profit margins and hinder the
ability of companies to plan or make capital expenditures.
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Among the early decliners were companies with large exposure
to China that includes chipmakers, industrial and material
companies. Apple Inc AAPL.O , fell 2.3% in premarket trading. Tariff
sensitive Boeing Co BA.N declined 1.4% and Caterpillar Inc
CAT.N dipped 1.7%.
Micron Technology Inc MU.O , Intel Corp INTC.O and
Qualcomm Inc QCOM.O fell between 1.7% and 2.7%.
The Philadelphia chip index .SOX ended last week down
about 6%, slashing its year-to-date gain to 28%.
At 7:14 a.m. ET, Dow e-minis 1YMc1 were down 320 points,
or 1.23 percent. S&P 500 e-minis ESc1 were down 37.75 points,
or 1.31 percent and Nasdaq 100 e-minis NQc1 were down 130.75
points, or 1.72 percent.
Away from trade issues, Uber Technologies Inc UBER.N was
down 3.9%, after ending down 7.6% on Friday in its first day of
trading as a public company in the most anticipated listing
since Facebook Inc FB.O .