Stock futures drop as Cisco disappoints; trade talks eyed

(Reuters) – U.S. stock futures dipped on Thursday after Cisco’s disappointing forecast, while investors fretted about rising U.S. Treasury yields and looming trade talks between the United States and China.

FILE PHOTO: Traders and guests gather for the IPO of PermRock Royalty Trust on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 2, 2018. REUTERS/Brendan McDermid

The world’s two economic powerhouses will resume trade negotiations over the next two days and officials from both sides have recently signaled that they are looking for a deal.

Japan is considering tariffs on U.S. exports worth $409 million in retaliation against U.S.-imposed steel and aluminum import tariffs, according to media reports.

Shares of Cisco Systems (CSCO.O) fell 3.9 percent in premarket trading after the company’s disappointing forecast indicated that its transition to a software-focused business was a work in progress.

Walmart (WMT.N) was up 1.1 percent after the retailer’s quarterly ecommerce sales growth slowed year-over-year, but was higher than the previous quarter.

The retailer’s results come after Macy’s (M.N) strong report helped power Wall Street on Wednesday and pushed the small-cap Russell 2000 to a record high.

At 7:23 a.m. ET, Dow e-minis 1YMc1 were down 22 points, or 0.09 percent. S&P 500 e-minis ESc1 were down 4.5 points, or 0.17 percent and Nasdaq 100 e-minis NQc1 were down 25.75 points, or 0.37 percent.

Yields on the 10-year Treasury notes US10YT=RR eked out a fresh 7-year highs, continuing a climb that was first triggered by Tuesday’s retail sales data that signaled the U.S. economy is on a stronger footing in the second quarter. [US/]

Coca-Cola (KO.N) rose 1 percent after Barclays upgraded the stock to “overweight.”

NetEase (NTES.O) dropped 9 percent after the Chinese internet company’s first-quarter profit missed Wall Street estimates.

On the economic front, data at 8:30 a.m. ET is expect to show initial jobless claims rose 215,000 last week from 211,000 the week before.

Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva

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