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US stock futures decline as focus shifts to spending bill

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Trade deals elusive ahead of higher tariffs on July 9

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Trading thinned by Wall Street, Treasuries holidays for

July 4

By Lawrence White

LONDON, July 4 (Reuters) -

Stocks slipped on Friday as U.S. President Donald Trump got

his signature tax cut bill over the line and attention turned to

his July 9 deadline for countries to secure trade deals with the

world's biggest economy.

The dollar also fell against major currencies with U.S.

markets already shut for the holiday-shortened week, as traders

considered the impact of Trump's sweeping spending bill which is

expected to add an estimated $3.4 trillion to the national debt.

The pan-European STOXX 600 index fell 0.8%, driven

in part by losses on spirits makers such as Pernod Ricard

and Remy Cointreau after China said it would

impose duties of up to 34.9% on brandy from the European Union

starting July 5.

U.S. S&P 500 futures edged down 0.6%, following a

0.8% overnight advance for the cash index to a fresh all-time

closing peak. Wall Street is closed on Friday for the

Independence Day holiday.

Trump said Washington will start sending letters to

countries on Friday specifying what tariff rates they will face

on exports to the United States, a clear shift from earlier

pledges to strike scores of individual deals before a July 9

deadline when tariffs could rise sharply.

Investors are "now just waiting for July 9," said Tony

Sycamore, an analyst at IG, with the market's lack of optimism

for trade deals responsible for some of the equity weakness in

export-reliant Asia, particularly Japan and South Korea.

At the same time, investors cheered the surprisingly robust

jobs report on Thursday, sending all three of the main U.S.

equity indexes climbing in a shortened session.

"The U.S. economy is holding together better than most

people expected, which suggests to me that markets can easily

continue to do better (from here)," Sycamore said.

Following the close, the House narrowly approved Trump's

signature, 869-page bill, which averts the near-term prospect of

a U.S. government default but adds trillions to the national

debt to fuel spending on border security and the military.

TRADE THE KEY FOCUS IN ASIA

Trump said he expected "a couple" more trade agreements

after announcing a deal with Vietnam on Wednesday to add to

framework agreements with China and Britain as the only

successes so far.

U.S. Treasury Secretary Scott Bessent said earlier this week

that a deal with India is close. However, progress on agreements

with Japan and South Korea, once touted by the White House as

likely to be among the earliest to be announced, appears to have

broken down.

The U.S. dollar index had its worst first half

since 1973 as Trump's chaotic roll-out of sweeping tariffs

heightened concerns about the U.S. economy and the safety of

Treasuries, but had rallied 0.4% on Thursday before retracing

some of those gains on Friday.

As of 1100 GMT it was down 0.1% at 96.96.

The euro added 0.2% to $1.1773, while sterling

held steady at $1.3662.

The U.S. Treasury bond market is closed on Friday for the

holiday, but 10-year yields rose 4.7 basis points

(bps) to 4.34%, while the 2-year yield jumped 9.3 bps

to 3.882%.

Gold firmed 0.4% to $3,336 per ounce, on track for a

weekly gain as investors again sought refuge in safe-haven

assets due to concerns over the U.S.'s fiscal position and

tariffs.

Brent crude futures fell 64 cents to $68.17 a

barrel, while U.S. West Texas Intermediate crude likewise

dropped 64 cents to $66.35, as Iran reaffirmed its commitment to

nuclear non-proliferation.