Dow Futures Signal Triple-Digit Slide on China Tariffs

Futures on the Dow Jones Industrial Average (DJI) are trading 159 points below fair value this morning, after President Donald Trump announced tariffs of 25% on up to $50 billion in Chinese goods "that contain industrially significant technologies." Trump also said the U.S. is prepared to impose even more tariffs if China retaliates, as Beijing's Commerce Ministry has already vowed to do. Today also marks the second quadruple witching Friday of the calendar year, as index and stock futures and options are all set to expire. 

Continue reading for more on today's market, including: 

• Buy calls on this energy stock for the summer.
• Oracle put premiums pop ahead of earnings.
• The catalyst behind ETSY's all-time high.
• Plus, TEVA ends a drug study; AT&T finalizes its Time Warner deal; and Broadcom announces layoffs.

5 Things You Need to Know Today

1. The Chicago Board Options Exchange (CBOE) saw 1.3 million call contracts traded on Thursday, compared to 629,148 put contracts. The single-session equity put/call ratio fell to 0.50, while the 21-day moving average remained at 0.57.
2. Teva Pharmaceutical Industries Ltd (NYSE:TEVA) is 1.6% lower in electronic trading after the company said it will cease a study of fremanezumab for chronic cluster headaches, after an analysis suggested it was unlikely to meet the end goal. Teva will continue trials of the drug for episodic cluster headaches. Buffett-endorsed TEVA could now be set to test support at its rising 20-day moving average, which has guided the stock higher since early April.
3. AT&T Inc. (NYSE:T) is fractionally higher in pre-market trading, after last night finalizing its $85.4 billion acquisition of Time Warner. T has shed 16.5% over the past 12 months, and on May 9 touched a two-year low of $31.17.
4. Broadcom Inc (NASDAQ:AVGO) announced the layoffs of more than 1,000 employees following its November purchase of Brocade for $5.5 billion. AVGO's 14-day Relative Strength Index (RSI) checked in at an overbought reading of 71.9 at Thursday's close, following a 19% rally from its May 3 year-to-date closing low, and the stock is 0.8% lower ahead of the bell today.
5. Today's calendar will feature the Empire State manufacturing survey, data on industrial production, and the University of Michigan's consumer sentiment index. There will also be Treasury International Capital data, as well as the Baker-Hughes weekly rig count. There are no earnings of note.

Asian Markets Sell Off on China Tariff News

It was another down day for Asian stock markets, though Japan’s Nikkei managed to buck the broader regional trend. Strength out of the pharmaceutical sector was a primary reason for the outperformance, and traders also responded to the Bank of Japan’s decision to hold rates steady. As such, the Nikkei finished with a 0.5% win. In China, sellers stepped in following reports of fresh tariffs out of the U.S.; the Shanghai Composite fell 0.7%, while Hong Kong’s Hang Seng shed 0.4%. The losses piled up in South Korea, too, where the Kospi dipped 0.8%.

European equities are also under pressure today amid ramped-up trade tensions. Mining stocks in particular are struggling, along with financial shares. On the flip side, engine maker Rolls-Royce is rallying after the company announced a fresh round of job cuts. London's FTSE 100 and the German DAX are down 0.7% and 0.2%, respectively, while France’s CAC 40 has managed to gain 0.2%.