U.S. stocks retreated at the start of trade Friday, reversing premarket gains after China announced retaliatory tariffs on U.S. imports, following the Trump Administration’s announcement of new import duties earlier this month.

The move comes ahead of a highly anticipated speech from Jerome Powell at a gathering of central bankers and academics in Jackson Hole, Wyo., which could help to crystallize market expectations for further monetary policy easing in the coming weeks.

How are the major benchmarks faring?

The Dow Jones Industrial Average

DJIA, -0.46%

 was down 117 points, or 0.4%, at 26,135, the S&P 500 index

SPX, -0.54%

 fell 14 points, or 0.5%, lower at 2,908, while the Nasdaq Composite index

COMP, -0.74%

 retreated 47 points to reach 7,944, a loss of 0.6%.

On Thursday, the The Dow rose 49.51 points or 0.2%, at 26,252.24, powered in large part by 4.2% gain in shares of Boeing Co.

BA, +1.58%.

Meanwhile, the S&P 500 slipped 1.48 points, or less than 0.1%, to 2,922.95, while the Nasdaq Composite Index gave up 28.82 points to 7,991.38, a decline of 0.4%.

For the week, the Dow is set to gain 1.4%, the S&P 500 is on track to return 1.2%, while the Nasdaq is on pace to end the week 1.2% higher, as of Thursday’s close.

Read: Stocks say the consumer isn’t as strong as government data suggests

What’s driving the market?

China’s State Council Custom Tariff Commission announced new tariffs of between 5% and 10% on $75 billion in U.S. imports Friday morning, set to go into effect in two tranches, on Sept. 1 and Dec. 15, respectively. The tariffs will be imposed on agricultural products, crude oil, small aircraft and cars among other goods. The Chinese government said that the move was in response to the Trump Administration’s plans to institute 10% tariffs on $300 billion in Chinese imports, also in two stages and on the same dates.

“China’s adoption of tariff-adding measures is a forced move to deal with US unilateralism and trade protectionism,” the Chinese government said in a statement.

The announcement came just hours before Federal Reserve Chairman Jerome Powell’s scheduled speech in Jackson Hole, Wyo., where academic economists and central bankers from around the world gathered starting Thursday to discuss monetary policy and the economic outlook.

Powell is set to speak Friday at 10 a.m. Eastern Time, and the Fed Chairman’s comments will be parsed for clues on what the central bank might do at its upcoming policy meeting Sept. 17-18, amid recessionary signals emanating from the bond market. The so-called yield-curve inversion, where the short-dated yield has risen above its longer-term counterpart, has raised anxieties about a looming recession in the U.S., because the condition has preceded the past seven recessions.

Federal Reserve Bank of St. Louis President James Bullard on Friday gave hope to investors that they can expect a second interest rate cut, following one in July, when the Fed meets in September. “I’d like to take out more insurance against downside risks” to the economy, he said, in an interview on CBNC Friday morning.

However, reports suggest that the Powell may disappoint investors hoping for further monetary easing by sticking to his previous stance that the Fed’s most recent interest rate reduction was a merely a “mid-cycle adjustment” and not the start of an easing trend.

Peter Cardillo, chief market economist at Spartan Capital Securities, said in a daily research note that while “we are not sure of the markets direction, one thing we believe is a near certain is that the Fed Chief will likely keep the markets guessing on a September move. In other words, no commitment.”

On Thursday, Dallas Fed President Robert Kaplan from Jackson Hole said he was open to more interest-rates cuts but stopped short of full-throated support for further rate reductions.

However, Kansas City Fed President Esther George and Philadelphia Fed President Patrick Harker, said on CNBC on Thursday that they would like to hold interest rates steady.

Which stocks are in focus?

Shares of Foot Locker Inc.

FL, -12.09%

 tumbled 9.7% early Friday, after the retailer reported second-quarter sales and profits that missed Wall Street expectations.

HP Inc.

HPQ, -6.29%

 shares fell 7.6% Friday morning, after the PC and printer manufacturer announced a Enrique Lores would assume the CEO role effective Nov. 1, along with third-quarter results that matched analyst expectations.

Salesforce.com Inc

CRM, +5.34%

 reported quarterly financial results late Thursday, showing revenue growth and earnings-per-share that beat Wall Street forecasts. The company’s stock rose 5.3%.

Shares of Intuit Inc.

INTU, +4.32%

 rose 3.4%, following a release of better-than-expected fiscal fourth-quarter results Thursday evening.

Hasbro Inc.

HAS, -5.55%

 announced plans late Thursday to acquire the British firm Entertainment One Ltd

ETO, +32.39%,

  in a deal that values the company at $4 billion. The toy maker’s stock retreated 5.2%.

How are other markets trading?

The yield on the 10-year U.S. Treasury note

TMUBMUSD10Y, -0.84%

 rose 0.2 basis point to 1.604%, while that of the 2-year note

TMUBMUSD02Y, -1.81%

 fell 0.5 basis point to 1.593%

Stocks in Asia traded mixed overnight, as China’s CSI 300

000300, +0.72%

 rose 0.7%, Hong Kong’s Hang Seng Index

HSI, +0.50%

 gained 0.5% and Japan’s Nikkei 225

NIK, +0.40%

 climbed 0.4%.

In Europe, stocks traded mostly lower, with the Stoxx Europe 600

SXXP, +0.05%

losing 0.3%.

In commodities markets, the price of U.S. crude oil

CLV19, -2.46%

  fell 2.8%, after China announced that U.S. crude oil would be subject to new tariffs. Gold prices

GCZ19, +0.57%

rose 0.4% to $1,514 per ounce. The U.S. dollar

DXY, +0.11%,

edged 0.2% higher against its major rivals.

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