The New York Stock Exchange is set to open lower on Wednesday morning, as fears of a return to Sino-American trade tensions dampen investors' spirits, which until now had been buoyed by the prospect of forthcoming rate cuts.

Half an hour before the opening, futures contracts on the main indices were down between 0.3% and 1.4%, signalling a sharply lower start to the session.

According to Bloomberg, the Biden administration was considering imposing tighter restrictions on foreign companies, particularly European ones, continuing to supply China with cutting-edge electronic chips.

At the same time, Donald Trump declared that he wanted to make Taiwan pay for the military protection the island currently enjoys from the United States.

The tone of his statements reminds investors of the one he used to employ during his tenure in the White House, when his 'tweets' dictated the trend on the markets.

His comments are taken all the more seriously given that a recent study taken up by Goldman Sachs estimates the probability of victory for the Republican candidate in the November presidential election at around 70%.

A return of Trump to the White House could lead to a new 'trade war'," worries one trader.

US equity markets had hit new all-time highs yesterday, with the prospect of two Fed rate cuts by the end of the year becoming increasingly clear.

The mixed results of healthcare giant Johnson & Johnson also weighed on the trend, with the group lowering its profit forecasts for the current financial year.

The day's economic indicators did little to reassure either, despite a 3% rebound in housing starts in June compared with the previous month.

U.S. building permits - supposed to foreshadow future housing starts - rose by 3.4% to 1,446,000 last month.446,000 last month.

On the currency markets, renewed tensions on the trade front pushed the dollar down against the euro, which took advantage of the situation to climb back above 1.0940 on the eve of the ECB's announcements.

Renewed risk aversion caused by trade tensions is also putting pressure on government bond yields, with the yield on 10-year Treasuries remaining below 4.19%.

On the oil front, crude oil prices are back on the rise ahead of the release of US weekly inventories later this morning, with US light crude up 1% at $81.6.

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