U.S. stock futures decline ahead of inflation reading

President Donald Trump said he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five major points, which led the blue-chip Dow index to snap a six-day winning streak on Tuesday.

With under three weeks to go before proposed talks between the United States and Chinese leaders, sources say there has been little preparation for a meeting even as the health of the world economy is at stake.

Trump also said that interest rates were “way too high”, ahead of a reading on U.S. inflation that could shift the odds toward a cut in rates as soon as July.

Hopes that the Federal Reserve will act to counter a slowing global economy due to escalating trade war have spurred a rally in stocks this month, with the S&P 500 index up about 5% so far in June.

Fed policymakers will meet on June 18-19 and markets have priced in at least two rate cuts by the end of 2019. Fed fund futures imply around an 80% chance of an easing as soon as July.

That might change depending on what U.S. consumer price data show at 8:30 a.m. ET. Headline inflation is expected to slow to 1.9%, with the core rate, excluding volatile items such as food and energy, steady at 2.1% on a year-on-year basis for May.

Investors will closely watch the data for further evidence of inflation after U.S. producer prices increased solidly for a second straight month in May, in line with expectations of economists polled by Reuters.

Meanwhile, concerns of a slowdown in China rose as data showed factory inflation slowed in May and the country reported the worst-ever monthly sales drop.

At 7:17 a.m. ET, Dow e-minis were down 63 points, or 0.24%. S&P 500 e-minis were down 6.5 points, or 0.23% and Nasdaq 100 e-minis were down 31.25 points, or 0.42%.

Trade-sensitive Caterpillar Inc dipped 0.1%, while Boeing Co dropped 0.7% in premarket trading.

Chipmakers and semiconductor equipment makers, which get a sizeable portion of revenue from China, declined, with Micron Technology Inc, Nvidia Corp and Applied Materials Inc trading down between 1.6% and 3%.

Qualcomm Inc slipped 4% after smartphone maker LG Electronics Inc and U.S. Federal Trade Commission opposed the chip supplier’s efforts to put a sweeping U.S. antitrust decision on hold.

Medidata Solutions fell 4.3% after France’s Dassault Systemes agreed to buy the U.S. firm focused on clinical trials for $92.25 per share, a discount of 3% to its last close.