U.S. stock futures indicated a sharply lower open on Thursday amid lingering anxiety about a possible economic slowdown and continued murkiness around trade relations with China.
Huawei CFO Meng Wanzhou was arrested by Canadian authorities on Wednesday in Vancouver, where she faces extradition to the U.S
. The arrest decreases the likelihood that a permanent U.S.-China trade deal will be reached. Huawei is one of the largest mobile phone makers in the world.
As of 7:10 a.m. ET Thursday, futures indicated that the Dow Jones Industrial Average would open 387.07 points lower. S&P 500 and Nasdaq futures also pointed to a lower open across Wall Street.
When futures opened overnight, there was an initial plunge lower on heavy volume that spooked traders but the futures rebounded off those lows. There were some reports from traders and media that the CME Group had to halt trading during the volatile overnight session.
A sharp decline in oil prices added to Wall Street's skittishness on Thursday. U.S. crude futures for January delivery fell 2.6 percent to $51.51 per barrel after the Saudi energy minister proposed a production cut that was smaller than expected.
The New York Stock Exchange, Nasdaq and U.S. Treasury market were closed Wednesday
as the nation remembered former president George H.W. Bush. On Tuesday, the Dow Jones Industrial Average shed nearly 800 points
in its largest decline since Oct. 10.
On Monday, the yield on the three-year Treasury note surpassed its five-year counterpart. That bond-market phenomenon, known as a yield-curve inversion
, is seen as a recession signal. But typically the recession doesn't come until years after and many traders won't see the inversion as official until the two-year yield rises above the 10-year yield.
Investors remain uncertain about the prospects of a permanent trade deal with China. Over the weekend, U.S. President Donald Trump met with Chinese President Xi Jinping to discuss ongoing trade quarrels between their two countries. While the White House has said it has worked out a cease-fire with Beijing, discrepancies in messaging haven't assuaged market fears of uncertainty
"Unfortunately until we get new news the market continues to be a caldron of concerns causing caution with investors," said Art Hogan, B. Riley FBR's chief market strategist. "With the combination of he said Xi said on China trade, a fear of an economic slowdown in 2019, and the slow trickle of Mueller investigation reports coming out, it is not at all surprising to see a buyer's strike in the after hours market."
Still, Hogan added, there will be a "plethora of data as markets open on Thursday and on Friday with the jobs report that might turn the tide of negative sentiment." But until then, he said, "we are stuck in a news vacuum and most of the news that we do have leans to the negative."
—CNBC's Tom Franck contributed to this report.