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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 despite record highs for Wall Street overnight, as U.S.

President Donald Trump's deadline for trade deals loomed next

week.

The dollar retraced some of Thursday's gains with U.S.

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

considered the impact of the sweeping spending bill that Trump

is expected to sign into law later in the day.

The pan-European STOXX 600 index fell 0.6%, 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 0.5%, 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, Thursday's jobs data showed "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.

Investors cheered the surprisingly robust jobs report on

Thursday, sending all three of the main U.S. equity indexes

climbing in a shortened session.

Following the close, the House narrowly approved Trump's

signature, 869-page bill, which would add $3.4 trillion to the

nation's $36.2 trillion debt, according to the nonpartisan

Congressional Budget Office.

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, agreements with Japan

and South Korea, once touted by the White House as likely to be

among the earliest to be announced, appear to have broken down.

The U.S. dollar rallied overnight, taking it up as much as

0.7% versus a basket of major peers after the robust

payrolls data saw traders take any expectations for a Federal

Reserve interest rate cut this month off the table. It ended

Thursday with a 0.4% rise.

On Friday, the U.S. currency gave back a little of those gains,

slumping 0.4% to 144.31 yen and sliding 0.2% to 0.7936

Swiss franc.

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 $3,339 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 7 cents to $68.73 a barrel,

while U.S. West Texas Intermediate crude was last seen

flat at $67.02.