Dow set to open lower as Wall Street braces for the next trade development

The Dow is set to open lower Monday after new threats of tariffs and retaliation prompted another global stock selloff.

Futures for the Dow are down 0.3%, while futures for the S&P 500 and the Nasdaq Composite are down 0.3% and 0.5%, respectively. European and Asian stocks also traded lower in Monday’s session.

President Donald Trump threatened to impose tariffs on Mexican imports on Friday, sending stocks, as well as the Mexican peso firmly lower. Also Friday, Trump announced India would be removed from a special trade program.

Over the weekend, Chines authorities said the country would “not back down” in the trade spat with the United States, blaming Washington for the breakdown of negotiations. Last week, Beijing signaled that it could blacklist foreign companies from its domestic market.

Amid the new woes, both China and Mexico showed some willingness to return to the negotiating table with the United States.

“The escalation of trade wars beyond China and lack of US fiscal support this year suggests that US exceptionalism could be at risk,” wrote Mark McCormick, global head of FX Strategy at TD Securities, in a note. “Though we think recent warning shot towards Mexico could be resolved, the road ahead on the global trade front is likely to remain challenged until the G20 later this month.”

Leaders of the group of 20 nations will meet in Osaka, Japan, in late June.

Stocks around the world have fallen under the trade uncertainty since the start of the year. Last week, the Dow logged its longest weekly losing streak since June 2011. Nevertheless, the Dow is still up more than 6% this year, and the S&P is still nearly 10% higher.

In May, the Dow and he S&P dropped 7%, respectively, their worst performance since December, while the Nasdaq fell 8%, recording its worst May performance since 2010.