How tough will China hit back?

U.S. equity futures slid, extending the stock market’s biggest weekly decline of the year, as a weekend of back-and-forth trade squabbling kept investors glued to news screens as earnings season wound down. “We not expect China to sell U.S. Treasuries,” ING said. This is a tool China will save as a last resort, and it may not even be used in the unlikely event of a breakdown in trade negotiations.”

June contracts on the S&P 500 Index fell 1.1% and futures the Nasdaq 100 Index retreated 1.2% as of 7:06 a.m. in London. Last week, the cash S&P 500 slid 2.2% amid the escalating international rift. President Donald Trump’s administration has told China it has a month to seal a deal or face tariffs on all its exports to the U.S., even as both sides sought to avoid a breakdown in negotiations despite a developing stalemate.

Last week’s retreat in U.S. equities was the biggest rupture in a stellar 2019 for bulls. What was an 18% gain in the benchmark has shrunk to 15% and the index sits about 65 points below the record 2,945.83 it touched April 30. Tech stocks bore the brunt, with the Nasdaq 100 Index falling 3.3% and the Philadelphia Semiconductor Index losing 5.9%.

Over the weekend, the White House’s top economic adviser, Larry Kudlow, said higher tariffs assessed on Chinese goods would have minimal impact on U.S. jobs and growth, while conceding that “both sides will suffer” from the trade war. Kudlow told “Fox News Sunday” that China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin back to Beijing, though no date has been set for new talks.