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The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to come under pressure after ending last Thursday’s trading little changed.

Lingering concerns about a global trade war are likely to weigh on Wall Street as traders await signs of progress on President Donald Trump’s trade talks.

Potentially adding to the worries, China has threatened to retaliate against any countries that reach a trade deal with the U.S. at the expense of China’s interests.

A spokesman for China’s Ministry of Commerce was asked to respond to reports the Trump administration is preparing to put pressure on other countries to restrict trade with China in exchange for U.S. tariff exemptions.

“If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner,” the spokesman responded, according to a Google translation. “China is determined and capable of safeguarding its own rights and interests.”

Overall trading activity may be somewhat subdued, however, as traders look ahead to release of earnings news from several big-name companies later this week.

Tesla (NASDAQ:TSLA), Boeing (NYSE:BA), IBM Corp. (NYSE:IBM), Alphabet (NASDAQ:GOOGL) and Intel (NASDAQ:INTC) are among the companies due to report their quarterly results in the coming days.

Traders are also likely to keep an eye on reports on durable goods orders and new and existing home sales, although any developments on the trade front are likely to remain in the spotlight.

Following the sell-off seen during Wednesday’s previous session, stocks showed a lack of direction over the course of the trading day on Thursday. The Nasdaq and the S&P 500 spent the day bouncing back and forth across the unchanged line before eventually closing narrowly mixed.

While the Nasdaq edged down 20.71 points or 0.1 percent to 16,286.45, the S&P 500 inched up 7.00 points or 0.1 percent to 5,282.70.

The narrower Dow showed a more significant move to the downside, tumbling 527.16 points or 1.3 percent to 39,142.23.

For the holiday-shortened week, the S&P 500 slumped by 1.5 percent, while the Nasdaq and the Dow plunged by 2.6 percent and 2.7 percent, respectively.

The steep drop by the Dow on the day largely reflected a nosedive by shares of UnitedHealth (NYSE:UNH), with the healthcare giant plummeting by 22.4 percent.

UnitedHealth tumbled to its lowest closing level in a year after the company reported weaker than expected first quarter earnings and cut its full-year profit forecast.

The lack of direction shown by the broader markets came amid lingering uncertainty about Trump’s tariffs despite his upbeat comments about trade talks.

Trump said in a post on Truth Social on Wednesday that “big progress” had been made in a meeting with the Japanese trade delegation.

“Had a very productive call with the President of Mexico yesterday,” he added in a post this morning. “Likewise, I met with the highest level Japanese Trade Representatives. It was a very productive meeting. Every Nation, including China, wants to meet! Today, Italy!”

In U.S. economic news, the Labor Department released a report unexpectedly showing a modest decrease by first-time claims for U.S. unemployment benefits in the week ended April 12th.

The report said initial jobless claims dipped to 215,000, a decrease of 9,000 from the previous week’s revised level of 224,000.

Economists had expected initial jobless claims to inch up to 225,000 from the 223,000 originally reported for the previous week.

A separate report released by the Commerce Department showed new residential construction in the U.S. pulled back by much more than expected in the month of March.

Despite the lack of direction shown by the broader markets, pharmaceutical stocks moved sharply higher, resulting in a 3.8 percent spike by the NYSE Arca Pharmaceutical Index.

Eli Lilly (NYSE:LLY) helped lead the sector higher, soaring by 14.3 percent after reporting positive results from a phase-three trial of a pill to treat weight loss and diabetes.

A continued surge by the price of crude oil also contributed to substantial strength among energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index jumping by 3.9 percent and 2.7 percent, respectively.

Transportation, telecom and housing stocks also saw considerable strength on the day, while gold stocks moved lower along with the price of the precious metal.

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