Wall St. set to open lower on Turkey turmoil

(Reuters) – U.S. stocks were set to open lower on Friday, as a plunging Turkish lira rattled global markets due to concerns over the country’s economy and a deepening rift with the United States.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018. REUTERS/Brendan McDermid

The moves in the currency market set a cautious tone on Wall Street, with 20 of the 25 most heavily traded stocks slipping into the red in premarket trading.

The dollar rose to a 13-month high against a basket of currencies also driven by rising trade tensions between Russia and the United States.

“Problems in emerging markets are more important than ever because of the global growth engine that emerging markets have become,” Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York, wrote in a note.

“This will eventually matter greatly to U.S. markets.”

Data on Friday showed U.S. consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures.

Investors are keeping a close watch on inflation numbers to gauge the impact of tariffs on pricing and for clues on the path of interest rate hikes.

At 8:43 a.m. ET, Dow e-minis 1YMc1 were down 106 points, or 0.42 percent. S&P 500 e-minis ESc1 were down 11.25 points, or 0.39 percent and Nasdaq 100 e-minis NQc1 were down 38 points, or 0.51 percent.

A surge in high-flying stocks such as Apple and Amazon, as well as strong earnings have driven U.S. stocks near record levels, suggesting that investors have largely shrugged off trade worries.

Intel (INTC.O) dropped 3 percent after Goldman Sachs downgraded the stock to “sell”. Micron (MU.O) also fell 1.6 percent.

Microchip’s shares fell 7.7 percent after the chipmaker forecast disappointing second-quarter revenue forecast.

Dropbox (DBX.O) fell 8.7 percent despite a better-than-expected quarterly report.

Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/businessNews/~3/Bv6ADnvFgeY/wall-st-set-to-open-lower-on-turkey-turmoil-idUSKBN1KV1A4